Article – US Export-Import Bank kicks in $790m to Rinehart's Roy Hill project

21 December 2013
Andrew Burrell
The Australian

AS the clock ticks towards Gina Rinehart’s end-of-year deadline to win debt funding for her huge $10 billion Roy Hill iron ore project in the Pilbara, the US Export-Import Bank has delivered her a major boost by kicking in almost $US700 million ($790m) in loans.

The bank’s decision came two days after the Korea Export-Import Bank agreed to provide $US1bn in debt and as other Asian institutions reportedly edged closer to formally joining one of the world’s biggest project financing deals.
It also came after Treasurer Joe Hockey this week singled out Roy Hill as a project that Australia needed to proceed, as he signalled he wanted to clear any potential roadblocks from new projects.
Roy Hill Holdings, which is 70 per cent owned by Mrs Rinehart, had set December 31 as its target date for raising around $7bn in debt.
However, even if that deadline passes the project now appears highly likely to go ahead.
The company yesterday refused to confirm or deny that it had finalised any loan deals.
“Roy Hill continues to make good progress with both its financing and on-ground works,” a spokesman said.
The US Ex-Im Bank said it had authorised a $US694m loan to Roy Hill Holdings in exchange for the purchase of American mining and rail equipment from companies such as Caterpillar, GE and Atlas Copco.
The deal will become the US government-backed bank’s second biggest loan in Australia after it authorised a $US2.95bn loan last year for the Australia Pacific liquefied natural gas project in Queensland.
In a statement, the bank said the Roy Hill loan would support 3400 US jobs.
“After a comprehensive review, the bank determined that this transaction represents a significant opportunity for American exporters to create and sustain American jobs,” Ex-Im Bank chairman Fred Hochberg said.
“Our financing positions American companies on a level playing field so they can close the sales and expand their homegrown workforces.
Other agencies believed to be involved in Roy Hill financing are Japan’s Nippon Export and Investment Insurance, the Japan Bank for International Co-operation and the Korea Trade Insurance Corporation.
Roy Hill has also sought support from the big four Australian banks.
The project involves a new mine capable of producing 55 million tonnes per annum of iron ore, a 344km railway and a new port at Port Hedland.
Courtesy of The Australian