Rinehart's Roy Hill project gets $1bn funding injection
Aussie mining billionaire Gina Rinehart's massive Roy Hill iron ore project is closer than ever to get a financial injection after lining up $4 billion in debt funding allegedly coming from export credit agencies (ECAs) such as Korea Eximbank, the US Development Bank, Japan Bank for International Co-operation (JBIC), China Exim and US Ex-Im.
According to Korea IT Times, Korea Exim Bank is offering US$550 million in loans and $450m in loan guarantees to the project.
Commercial banks, which initially were said to be financing the other $3 billion needed to develop the mine, has decided not to take part in the financing of the massive project in the Pilbara region of Western Australia, the newspaper reported.
Given the amount of contracts Roy Hill has been letting in the past year, the project – the biggest to emerge in Australia in decades – has been burning through equity, putting pressure on Rinehart and her partners to complete the debt financing, which was expected to be finalized last year.
The $10 billion project, originally expected to begin production this year, is way behind schedule. While the company last pushed it out to September 2015, industry analysts believe it is more likely to see the light by 2016. This, of course, assuming it solves the financing issue.
Gina Rinehart's Hancock Prospecting owns a 70% interest in the project, South Korea's Posco and STX Corp holds 15%, Japanese firm Marubeni has a 12.5% stake while Taiwan's China Steel Corp holds the remainder.
Rinehart is the Australia's richest person with a fortune estimated at some $17 billion thanks to control of Hancock, which she inherited from her father who claimed swathes of the rich Pilbara iron ore deposits in the 1950s.