On Monday Clive Palmer announced he had “secured” from China’s Eximbank an extra $1.2 billion funding commitment, aimed at underpinning his Galilee Basin China First coal project in Queensland.
Despite the collapse at the weekend of the planned $3.6 billion Hong Kong Stock Exchange float of his Resourcehouse coal and iron group which was to provide the equity to develop China First Mr Palmer also claimed to have commitments to another $600 million in funding from Chinese sources.
Mr Palmer’s statement on Monday indicated Eximbank’s extra “commitment”, which he said lifted its funding of the $8.6 billion project from $5.6 billion to $6.8 billion was not a direct project loan but “a buyers’ credit facility”.
It’s presumably designed to fund coal purchases and may well boost the bankability of the rest of the project.
The project, known as “China First”, will mine 1.4 billion tonnes of coal in the Galilee Basin, southwest of Mackay in central Queensland.
The venture’s feasibility study suggests the entire project will cost $6.55 billion to set up.
This includes $2.1 billion for a 490-kilometre-long train line, $3.18 billion for mine equipment and infrastructure construction and $1.27 billion in port construction.
1500 full-time mining jobs created
As chairman of Waratah Coal, Mr Palmer said the China First project would create around 6000 direct jobs during construction and 1500 during operation.
The mining magnate estimated the project would add about 45,000 jobs overall to the Australian economy.
While the mine still needs state and federal government approval, Mr Palmer said it would be very “petty” if Ms Bligh blocked the project for political reasons.
Mr Palmer, who returned to Brisbane from China this week, also announced that Waratah Coal had entered into a memorandum of understanding with China’s Metallurgical Corporation of China (MCC) to develop the project.
“MCC has agreed to be the engineering, procurement and civil (EPC) contractor of the project by providing a fixed price, lump sum construction price for the entire project,” he said.
“They have also agreed to arrange debt funding of up to 60 per cent of the total capital cost.
As a result, MCC has guaranteed that it will purchase 30 million tonnes of coal per annum, which equates to $70 billion over the 25-year lifespan of the project.
The government will respond to the announcement at 2.30pm on Wednesday when Infrastructure Minister Stirling Hinchcliffe has called a news conference.
It said it would not be a mining tenement holder but had “contract rights to mine” various quantities of coal and iron ore granted by Mr Palmer’s private companies, Waratah Coal and Mineralogy.