Gina’s Rinehart’s immense gamble is almost ready:
Australian billionaire Gina Rinehart’s Roy Hill iron ore project is close to finalising a $7.8 billion financing deal, sources said, a vital step towards an end-2015 start for the giant mine in Western Australia’s iron-rich Pilbara district.
The 55-million tonnes-a-year project, which would make Roy Hill Australia’s fourth-largest iron ore producer, will add to hefty new supplies coming on line from Rio Tinto, BHP Billiton and Fortescue Metals Group.
Other miners are rethinking expansion and cutting costs as iron ore prices drop.
…”The agreement is not completely settled yet. All the views have to be gathered as there are a lot of stakeholders. But as of now I don’t see any problems, and a March signing looks likely,” said one source with direct knowledge of the negotiations.
…”According to current plans, first shipment is expected in the latter half of 2015. It can be understood as a trial run just before construction is expected to be completed by end-2015,” said the source.
A second source said the total included a working capital facility of about A$600 million and around $3 billion from commercial banks. Six other sources identified a group of 14 banks from Australia, Japan, China and Europe who were financing the deal. Included in the financing was a yuan tranche provided by Industrial and Commercial Bank of China (ICBC) and Bank of China Ltd to pay for equipment from China, one of those sources said.
And a reminder of the iron ore market that Roy Hill will enter:
What’s more, I think it likely that Chinese rebalancing will either be underway in earnest or about to happen via crisis.
Pass the popcorn!
