Article – Korea EximBank to Lend $1 Bil. in Australian Iron Ore Development Project

17 December 2013
Korea Economic Daily
Korea EximBank said on December 16 that it would provide a US$1-billion project financing loan to the Roy Hill iron ore mining project in the Pilbara region of Western Australia. The state-run bank will lend $550 million in loans and $450 million in loan guarantees to the project led by POSCO and implemented by Samsung C&T.
In addition to Korea EximBank, other financial institutions such as Korea Trade Insurance Corp. ($1 billion), U.S. Ex-Im Bank ($700 million), Japan Bank for International Cooperation ($900 million), and Nippon Export and Investment Insurance Corp. ($750 million) will participate in the deal. The total investment sum is estimated at $12 billion.
A Korea EximBank official said, “With this project, Korean companies will be able to secure iron ore supplies of 15 million tons, equivalent to 22 percent of annual iron ore imports.”
In this project financial deal, however, Korean banks decided not to take part. The Korea EximBank official said, “Although the deal is low in risk as our bank provides guarantees, the six banks that initially showed interest in the deal decided to stay away from it because it takes too much time to see any profit and they had little experience in resource development lending.”
Courtesy of the Korea Economic Daily