UPDATE: Resourcehouse Says China Banks To Support Coal Project
November 20 2009 - 2:45AM
Dow Jones News
Privately-held Resourcehouse Ltd., controlled by Australian
mining billionaire Clive Palmer, said Friday it has received a
letter of support from Chinese banks interested in backing its
A$7.5 billion thermal coal project in Queensland.
Palmer, who is chairman of Resourcehouse, declined to comment on
plans to float the company on the Hong Kong exchange in a US$2.5
billion initial public offering that is due later this month,
according to a person familiar with the situation.
The mining magnate signed a memorandum of understanding in May
with Metallurgical Corp. of China Ltd., or MCC, that will see the
Chinese group develop the Queensland coal project and arrange 70%
of project costs through debt financing.
The deal will see MCC take a 10% stake in the project and has
committed to buy 30 million of the 40 million tons a year that the
mine is slated to produce, and Palmer said a Hong Kong listed power
company has now been lined up as the end user of the coal, although
he declined to name the company.
MCC President Shen Heting has delivered a letter of support from
Chinese banks for the project, dubbed "China First" by Palmer, and
will visit the project site this weekend.
"This is a most significant day for the China First project when
someone of the stature of Mr Shen comes to Australia to personally
deliver a letter of support for the project from the Chinese
banks," Palmer said.
MCC is also partnering Palmer's Australasian Resources Ltd.
(ARH.AU) in an iron ore project in the Pilbara region of Western
Australia and the magnate said there are also talks underway on
possible cooperation on another iron ore project in the region.
"That would involve financing, probably, from China as well and
offtake," he said.
Palmer hopes to start construction on the China First coal
project in 2010 and to begin mining in 2013.
The development, which was this week granted Major Project
Facilitation status by the Australian Government, will include a
490-kilometer heavy haul railway line and a 40-million-ton,
two-berth export coal terminal at Abbot Point.
Palmer also owns the Yabulu nickel refinery, which he purchased
from BHP Billiton Ltd. (BHP.AU) in July, and he had been tipped as
a possible bidder for BHP's Ravensthorpe nickel laterite mine,
which had supplied some of the feedstock to the Yabulu plant.
However, Palmer said Friday he is not interested in buying the
Ravensthorpe operation in its current form and can replace the
material from Ravensthorpe with nickel from Papua New Guinea.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com
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