14/11/2012 - 13:46

Hancock confident on Roy Hill funding

14/11/2012 - 13:46


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Hancock Prospecting executive director Tad Watroba says the company is confident of its ability to secure about $7 billion in debt to fund its Roy Hill iron ore project.


His comments follow speculation that Gina Rinehart's private company and its joint venture partners were struggling to lock in debt fundng, following the volatility in iron ore prices, rising construction costs and the continuing European debt crisis.

Mr Watroba told the Australian Resources Conference in Perth the company was in the final stages of drawing up terms of agreement for finance negotiations, which he expected to be completed in the next three to four months.

With that milestone being reached, he said debt funding should be secured by the middle of next year.

The total project cost has not been revealed, but it’s estimated to be around $9.5 billion.

Mr Watroba said about $7 billion would be funded via debt arrangements with Hancock's joint venture partners - Japan’s Marubeni, South Korea’s POSCO, plus STX Corp, and China Steel Corp – funding the remainder.

Mr Watroba said more the $1 billion had already been spent on the project, and the big four Australian banks had shown significant support for the 55 million ton per annum project.

"We have been getting very good support from all four big Australian banks; they're very keen to invest in very good projects,” he said.

"Their job is to loan money but the question is whether they will...(but) all are telling us they believe Roy Hill to be one of the best projects so we are really looking forward to ticking all of the boxes.”

Mr Watroba also revealed the company expected an engineering, procurement and construction contract to be signed with JV partner POSCO by the middle of December.

Hancock is forecasting first ore on first from the Roy Hill project for the third quarter of 2015 – delayed from initial plans for late 2014.




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