Rinehart secures US$7.2 bil. funding plan for iron mine
March 22, 2014, 12:08 am TWN
SYDNEY--Australia's richest person Gina Rinehart on Friday announced a US$7.2 billion funding package for her massive Roy Hill iron ore mine in Western Australia that will help feed Asian steel demand.
The deal, signed in Singapore Thursday, will see a consortium of 19 commercial banks from Australia, Japan, South Korea, China, Europe and Singapore, and a number of major export credit agencies, provide the finance.
Roy Hill chief executive Barry Fitzgerald said it was the biggest funding package of its kind in the world that he knew of.
"I am advised this is the largest ever project financing for the development of a land-based mining project worldwide," he said in a statement.
Rinehart's company, Hancock Prospecting, owns 70 percent of the project, with the rest in the hands of South Korean steel giant Posco, Japan's Marubeni Corporation and Taiwan's China Steel Corporation.
Once up and running, the US$10 billion project, with a mine life of 20 years in the resource-rich Pilbara region, will be capable of producing 55 million tons per year of the steelmaking commodity, making it one of the world's biggest producers.
The first exports are scheduled for September 2015, with Rinehart describing the project as "a crucible of opportunity during a period of global uncertainty."
"The project has strong partners with international experience in finance, engineering, construction, marketing and logistics which has assisted in the attraction of support from the international financial community," she said.
"It is a strong vote of confidence in Hancock and Roy Hill that this financing has attracted such substantial international investment and support."
The mine, which is already being built, will employ up to 3,600 people during construction and a further 2,000 staff once operations start.
"We look forward to becoming a major iron ore producer on an international scale, and thank our partners for their steadfast support for this major Australian project," Rinehart added.
The securing of funding is the culmination of a more than 60-year dream by the Rinehart family — since Gina's late father Lang Hancock first discovered the massive deposits — to build their own iron ore mine.
While some analysts have questioned whether the world needs more iron when new mines are starting up across the globe, Gavin Wendt from MineLife said the quality of the ore at Roy Hill would make the difference.