Australia’s richest woman has thrown Washington mining mogul Chris Ellison a $1 billion lifeline just days before learning the outcome of an investigation into allegations of tax evasion.

Gina Rinehart’s Hancock Prospecting will invest $1.13 billion on Mineral Resources’ oil and gas projects in the Perth Basin and an exploration acreage in the Carnarvon Basin.

It comes at a critical time for Mineral Resources, which is awash in debt in addition to being investigated by Australia’s corporate watchdog ASIC over allegations of tax evasion.

So why has Ms Rinehart taken the plunge now, checkbook in hand, and how will this change the face of WA’s gas industry?

Tax evasion scandal

Earlier this month, Nine Newspapers alleged that Mr Ellison and four other senior Mineral Resources executives defrauded the company’s taxpayers and shareholders of about $7 million by transferring company funds to a series of accounts based in the British Virgin Islands ( BVI) – a jurisdiction where companies do not have to pay income tax.

It was alleged that Mr Ellison and his associates arranged for Mineral Resources to buy mining equipment from BVI companies at massively inflated prices, the spoils of which were then transferred to their individual offshore accounts on which they paid no tax.

The investigation also alleged that Mineral Resources used the inflated prices it paid for the machinery to claim increased tax deductions on depreciation costs.

Mineral Resources’ board has hired law firm Herbert Smith Freehills to investigate the allegations, and the results of that investigation are expected to be revealed on Monday.

The lifeline for MinRes

Resources industry analyst Tim Treadgold said the deal’s importance to mineral resources could not be understated.

“It’s not quite a get-out-of-jail-free card, but it’s not far off,” he said.

“They had huge debt in their iron ore division that developed the Onlsow project and they did it at the wrong time because their lithium assets were also struggling.”

“(Mrs. Rinehart) probably could have gotten a lower price from Ellison, but she also seems to have lent a helping hand.”

What’s in it for Rinehart?

Mr Treadgold said the purchase would build on Hancock Prospecting’s existing assets in the Perth Basin and position the company as a leading player in WA’s gas industry alongside Beach Energy.

“(Ms Rinehart) already has assets in the Perth Basin that are adjacent to what MinRes has and play the role of what you would call the Perth Basin gas consolidator,” he said.

“She will be the person bringing more gas to the Perth market together with Strike Energy and its partners.”

What does it mean for gas in WA?

Western Australia has some of the largest offshore gas reserves in the world, but most of it is exported overseas.

The state government last month lifted its ban on onshore gas exports amid efforts to boost domestic gas supply.

Mr. Treadgold said the latest acquisition of Hancock Prospecting could also support those efforts.

“It’s actually a very encouraging move for Perth gas supply because it means the assets are now in the hands of people who can afford to develop them,” Mr Treadgold said.

“Rinehart will bring its gas assets and MinRes into production, and both will ultimately ship some of their gas offshore through export agreements with the Northwest Shelf.”

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