The Roy Hill iron ore mine in the Pilbara, Gina Rinehart’s $10 billion gamble in the Pilbara has edged closer to final investment approval.
The newest iron mine in Australia under development will create thousands of new mining jobs when construction is completed.
Gina Reinhart and Roy Hill Holdings has been attempting to arrange about $7 billion in debt funding for the project by its end-of-year deadline. The Korea Export-Import Bank agreed has agreed to finance $US1bn (AUD$1.12bn) in debt. Other financial institutions have been reportedly joined the financing deal.
It’s though that Korea Exim Bank will provide $US550 million in loans and $US450m in loan guarantees for the Roy Hill Iron Ore Mine.
The Korea IT Times said other financial institutions including Korea Trade Insurance Corporation ($US1bn), the US Ex-Im Bank ($US700m), Japan Bank for International Co-operation ($US900m) and Nippon Export and Investment Insurance Corporation ($US750m) — would also participate in the Roy Hill Iron Ore Mine financing.
One of the conditions of the loan to Roy Hill Holdings is that the company buy US mining and rail equipment from companies like as Caterpillar, GE and Atlas Copco. Caterpillar has a big slice of the Australian mining equipment and machinery market and they plan to supply the latest CAT haul trucks to the Roy Hill Iron Ore Mine, just as it has already done for Fortescue, Rio Tinto and BHP Billiton who operate similar iron ore mines close by in the Pilbara.
One of the driving forces behind the Korean investment is that Korean companies will be able to secure Australian iron ore supplies of 15 million tons. Steel is used heavily in the Korean automotive and shipbuilding industries, and a regular supply of iron ore is the lifeblood of the Korean economy. This new deal will mean iron ore imports from the Roy Hill mine will be equivalent to 22 per cent of Korean annual iron ore imports.
Roy Hill is 70 per cent-owned by Mrs Rinehart’s Hancock Prospecting, with the rest split between Korean corporate giant Posco, Japan’s Marubeni and Taiwanese steelmaker China Steel Corporation.
Roy Hill Iron Ore Mine Facts
Roy Hill operations will consist of:
- 55 Mtpa mine , processing plant , airport and permanent accommodation village
- 344 kilometre heavy haul railway linking the mine and port
- Port stockyard and two berth export facility in Port Hedland
- Corporate Headquarters and Remote Operations Centre based in Perth
Samsung has also invested heavily in the Roy Hill iron ore project and are the lead contractor. Samsung have awarded more than 100 mining contracts worth $3bn since September 2013.
Forge, in a JV with Spanish company Duro, has been awarded a $1.47b contract for construction of the 55mtpa processing plant, NRW Holdings won the main $620m rail earthworks package and Leighton Holdings subsidiary, John Holland, will be responsible for $275m rail construction and trackworks.
For people who are interested in the contracts and supplier briefing document for the Roy Hill iron ore project, download the Roy Hill Supplies Briefing document. This document contains invaluable information about the project as well as what kinds of jobs and construction projects form the total mine development.
The announcement comes as iron ore prices continue to remain fairly strong at slightly above $US130 per tonne.
Roy Hill hopes to begin producing iron ore in late 2015 and ramp up operations to a maximum capacity of 55 million tonnes per year.