From the AFR, Roy Hill continues to suck in seed finance:
The partners, Japan’s Marubeni, Korean conglomerate Posco and Taiwan’s China Steel Corporation, are not obliged to contribute more equity to Roy Hill until $US7 billion ($7.82 billion) in debt funding for the project is locked away.
But documents registered with the Australian Securities and Investments Commission on Thursday indicate that an extra $185 million has been tipped into joint venture company Roy Hill Holdings in the past two weeks.
This latest investment was made less than a month after the partners stumped up $372 million in the first equity call on Roy Hill’s partly paid shares in almost a year.
…Concerns about the consequences of a funding shortfall are believed to have led Ms Rinehart to take up an offer of a bridging loan from ANZ Banking Group as a safeguard.
Meanwhile, the largest impediment to Roy Hill, Rio Tinto, will surprise nobody with its admission that production at its giant Simandou pr0ject has been delayed:
RIO Tinto has delayed targeted production from the $US20 billion ($22.4bn) Simandou iron ore project in Guinea by three years, as African development plans hatched during the boom years continue to drift.
It is understood the Simandou partners — Rio, China’s Chalco and the World Bank — have signed a draft agreement with the Guinea government that says first exports are now not expected until the end of 2018.
What we have here is a game between Rio and aspiring market entrants as they play price against rising supply against their own earnings and each other’s expansion plans. Postponing Simandou does little to alter the big supply ramp into the future but does make it appear Rio is focused on value. However, it does nothing to unblock Roy Hill which sits behind Rio’s Pilbara 360 project, its major ramp up project.
Of course Rio and Rinehart are partners elsewhere. Being a fly on the wall at board meetings would be fun.
