30/03/2012 - 11:00

Marubeni, POSCO increase Roy Hill stake for $3.2bn

30/03/2012 - 11:00

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Marubeni, POSCO increase Roy Hill stake for $3.2bn
An artist's impression of the port component for the 16.5 million tonne per year iron ore operation at Roy Hill.

A consortium featuring Japan’s Marubeni and Korea’s POSCO has confirmed it will take a 30 per cent equity stake in Hancock Prospecting’s Roy Hill iron ore project in the Pilbara, in a deal that values the project at more than $12.8 billion.

The companies announced today the consortium, which also includes STX Corporation, had acquired a 25 per cent equity stake in Roy Hill Holdings, the holding company of the project, in exchange for $3.2 billion of project development funding.

Marubeni and POSCO will each contribute $1.5 billion, while STX will chip in $200 million. 

In addition, POSCO and STX acquired a 5 per cent stake in Roy Hill Holdings, pursuant to the conversion of an existing $332 million perpetual note.

Following completion of the transaction, POSCO will hold a 15 per cent stake in Roy Hill, Marubeni 12.5 per cent and STX 2.5 per cent, while Hancock Prospecting will retain the remaining 70 per cent interest.

Hancock Prospecting chairman Gina Rinehart said she was pleased to finalise the strategic alliance with POSCO and STX.

“Having strong partners with international experience in finance, engineering, construction, marketing and logistics will provide support for Roy Hill and assist in securing debt financing,” Ms Rinehart said in a statement.

“The confidence and commitment which such major international companies have placed in Roy Hill, at a time of global economic uncertainty, speaks volumes for the robustness and integrity of the project.”

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