U.S. Taxpayers Back Loan for Australia's Richest Person

Nov 21, 2013

The United States Export-Import (ExIm) Bank is at it again. Bloomberg reports the Bank "gave preliminary approval for $694 million in financing for billionaire Gina Rinehart's Roy Hill iron ore project in Australia."

Four quick questions about this 122-word report.

  1. Who is Gina Rinehart? According to Forbes, she is Australia's richest person, worth an estimated $17 billion.
  2. Which U.S. companies will benefit? Companies like Caterpillar Inc. (market cap. $53.24 billion) and General Electric Co. (market cap. $273.98 billion).
  3. Why are taxpayers subsidizing a business deal between an Australian billionaire and titans of American industry? According to Bloomberg, the arrangement will "support the purchase of mining equipment" from the aforementioned companies, which by the Bank's definition apparently represent "risks that the private sector is unable or unwilling to accept." If that sound an awful lot like a Fannie Mae for exporters, that's because it is.
  4. How can we stop these "taxpayer-subsidized loans to U.S. exporters"? Congress can simply refuse to reauthorize the ExIm Bank. After September 30, 2014, the Bank will no longer be able to approve new taxpayer-backed financing, thus putting an end to what then-Senator Obama called "little more than a fund for corporate welfare."

According to Bloomberg, the money will help build a $10.7 billion "iron-ore mining venture in Western Australia's Pilbara region, comprising a mine, rail and port operations." So American taxpayers have that going for them.