Rinehart's Roy Hill starts owner-operator mining
Aussie mining billionaire Gina Rinehart's massive Roy Hill iron ore project entered its next phase on Monday with the official start of owner/operator mining at the West Australian site.
Rinehart, chairman of unlisted miner Hancock Prospecting, said Roy Hill "will employ thousands of Australians for decades and earn much needed export revenue for Australia. Roy Hill is currently the largest single mainland construction project in Australia."
Roy Hill received $7.2 billion financing package from a consortium of lenders, the biggest ever provided for a mining project in the world according to Hancock, in March after 18 months of negotiations.
Roy Hill will start shipping 55-million tonnes-a-year as early as September 2015 using a dedicated port and 344km railway and slot in behind Fortescue Metals Group as Australia fourth largest producer.
Hancock holds 70% of the mine with equity partners Korea's POSCO, Japan's Marubeni and Taiwanese steel maker China Steel Corp, holding the remainder. The group has already spent over $3 billion on the project and the final bill is pegged at $10 billion.
Roy Hill would add even more supply to a market expected to absorb some 170 million additional seaborne tonnes this year and next as the Big 3 iron ore miners continue to expand operations.
Slowing demand in top consumer China and the extra tonnage has seen benchmark prices reach $87 a tonne, near five-year lows. That compares to over $130 a tonne when the project came off the drawing board.
Rinehart is 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.