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Saturday 24 January 2009
Australia’s richest woman seeks Chinese partners for mine projects
Australia’s richest woman, Gina Rinehart, has a team in China seeking partners to finance her second iron ore project and a coal mine, betting the Asian nation will succeed in engineering a recovery.
Australia’s richest woman seeks Chinese partners for mine projects
Bloomberg in Newman 23 January 2009
Australia’s richest woman, Gina Rinehart, has a team in China seeking partners to finance her second iron ore project and a coal mine, betting the Asian nation will succeed in engineering a recovery.
“I have confidence that China will get it right and it will be booming again soon,” Ms. Rinehart said.
“This dip that we are seeing right now is a great time to focus our thoughts on how we should be doing things better.”
Ms. Rinehart expects to sign partners for both projects this year.
She also wants labour laws changed to allow hiring of lower-cost overseas workers to help develop projects to increase the nation’s mineral exports.
China is spending 4 trillion yuan (HK$4.54 billion) to stimulate an economy that grew at the slowest pace in seven years in the fourth quarter amid a global recession that has sent commodity prices plunging.
The Asian nation wanted to keep investing in Australian mines to avoid supply shortages when its economy rebounded, Ms. Rinehart said.
Brad Shallard, an equities trader at Bell Potter Securities, said: “We’ll probably see more of this type of deals from the Chinese this year given current prices.”
Global demand for iron ore, driven by China, made Ms. Rinehart and fellow iron ore magnate Andrew Forrest the richest woman and man in Australia, according to BRW magazine’s annual rich 200 list published in May.
Ms. Rinehart had personal wealth of A$4.4 billion (HK$22.48 billion), which might rise more than A$500 million annually because of the development of the Hope Downs iron ore mine in Western Australia, BRW said.
Production at the Roy Hill mine in Western Australia and the Alpha coal project on the other side of the continent in Queensland was targeted to start by 2012, Ms. Rinehart said.
Western Australia has A$29 billion of iron ore and steel projects being planned or built, according to its government.
Australia’s commodity forecaster predicts iron ore exports will rise 52 per cent to A$31 billion this fiscal year, and expects a recovery in demand for energy and minerals late this year.
Chinese government measures to boost demand in the world’s second-biggest vehicle market were also positive for steel demand, Ms. Rinehart said.
The deterioration in the global economy did prompt Ms. Rinehart to shelve plans for an initial public offering of Roy Hill in favour of a sale of less than 50 per cent.
“We hope to see an Asian partner in that project,” Ms. Rinehart said.
She wants to retain control with a stake of just more than 50 per cent.
Ms. Rinehart is the chairman of Hancock Prospecting, founded by her father Lang Hancock, which has already spent A$100 million on exploration at Roy Hill as part of the recently completed financing study.
She would not say what it would cost to develop, though the first stage of the nearby Hope Downs iron ore joint venture with Rio Tinto Group cost A$1.3 billion to build.
Rio Tinto, the world’s second-largest iron ore exporter, cut shipments by 18 per cent in the fourth quarter as steelmakers idled furnaces.
Mr. Forrest’s Fortescue Metals Group, which last year started production at an iron ore mine next to Hancock’s Roy Hill, has also failed to meet output targets.
Baosteel Group Corp, China’s biggest steelmaker, last year said it might buy a stake in Fortescue to cut reliance on its bigger Australian rivals.
“The crisis is not just an economic one, it’s also a financial one, and it’s got some real teeth,” Ms. Rinehart said.
“From an Australian perspective, so much depends on China.”
China’s economy grew 6.8 per cent in the fourth quarter of last year, the slowest pace in seven years, according to the statistics bureau.
BHP Billiton, the world’s biggest mining company that has forecast 8 per cent growth, on Wednesday said the outlook for the world’s third-largest economy was still uncertain.
Annual contract iron ore prices would likely fall this year after rising the last six years as China expanded steel output, Ms. Rinehart said.
Roy Hill may have an iron ore resource of 1.6 billion tonnes, making it big enough to develop a railway and dedicated port facility similar to Australia’s three biggest exporters, BHP, Rio Tinto and Fortescue.
Developing that kind of infrastructure would be easier in Australia if the government relaxed regulations that barred firms from employing overseas workers at less than Australian minimum wages, Ms Rinehart said.
“It won’t matter so much to Australians what the guest labourers get if they’re employed at worldwide conditions,” she said.
1 comment:
Australia’s richest woman seeks Chinese partners for mine projects
Bloomberg in Newman
23 January 2009
Australia’s richest woman, Gina Rinehart, has a team in China seeking partners to finance her second iron ore project and a coal mine, betting the Asian nation will succeed in engineering a recovery.
“I have confidence that China will get it right and it will be booming again soon,” Ms. Rinehart said.
“This dip that we are seeing right now is a great time to focus our thoughts on how we should be doing things better.”
Ms. Rinehart expects to sign partners for both projects this year.
She also wants labour laws changed to allow hiring of lower-cost overseas workers to help develop projects to increase the nation’s mineral exports.
China is spending 4 trillion yuan (HK$4.54 billion) to stimulate an economy that grew at the slowest pace in seven years in the fourth quarter amid a global recession that has sent commodity prices plunging.
The Asian nation wanted to keep investing in Australian mines to avoid supply shortages when its economy rebounded, Ms. Rinehart said.
Brad Shallard, an equities trader at Bell Potter Securities, said: “We’ll probably see more of this type of deals from the Chinese this year given current prices.”
Global demand for iron ore, driven by China, made Ms. Rinehart and fellow iron ore magnate Andrew Forrest the richest woman and man in Australia, according to BRW magazine’s annual rich 200 list published in May.
Ms. Rinehart had personal wealth of A$4.4 billion (HK$22.48 billion), which might rise more than A$500 million annually because of the development of the Hope Downs iron ore mine in Western Australia, BRW said.
Production at the Roy Hill mine in Western Australia and the Alpha coal project on the other side of the continent in Queensland was targeted to start by 2012, Ms. Rinehart said.
Western Australia has A$29 billion of iron ore and steel projects being planned or built, according to its government.
Australia’s commodity forecaster predicts iron ore exports will rise 52 per cent to A$31 billion this fiscal year, and expects a recovery in demand for energy and minerals late this year.
Chinese government measures to boost demand in the world’s second-biggest vehicle market were also positive for steel demand, Ms. Rinehart said.
The deterioration in the global economy did prompt Ms. Rinehart to shelve plans for an initial public offering of Roy Hill in favour of a sale of less than 50 per cent.
“We hope to see an Asian partner in that project,” Ms. Rinehart said.
She wants to retain control with a stake of just more than 50 per cent.
Ms. Rinehart is the chairman of Hancock Prospecting, founded by her father Lang Hancock, which has already spent A$100 million on exploration at Roy Hill as part of the recently completed financing study.
She would not say what it would cost to develop, though the first stage of the nearby Hope Downs iron ore joint venture with Rio Tinto Group cost A$1.3 billion to build.
Rio Tinto, the world’s second-largest iron ore exporter, cut shipments by 18 per cent in the fourth quarter as steelmakers idled furnaces.
Mr. Forrest’s Fortescue Metals Group, which last year started production at an iron ore mine next to Hancock’s Roy Hill, has also failed to meet output targets.
Baosteel Group Corp, China’s biggest steelmaker, last year said it might buy a stake in Fortescue to cut reliance on its bigger Australian rivals.
“The crisis is not just an economic one, it’s also a financial one, and it’s got some real teeth,” Ms. Rinehart said.
“From an Australian perspective, so much depends on China.”
China’s economy grew 6.8 per cent in the fourth quarter of last year, the slowest pace in seven years, according to the statistics bureau.
BHP Billiton, the world’s biggest mining company that has forecast 8 per cent growth, on Wednesday said the outlook for the world’s third-largest economy was still uncertain.
Annual contract iron ore prices would likely fall this year after rising the last six years as China expanded steel output, Ms. Rinehart said.
Roy Hill may have an iron ore resource of 1.6 billion tonnes, making it big enough to develop a railway and dedicated port facility similar to Australia’s three biggest exporters, BHP, Rio Tinto and Fortescue.
Developing that kind of infrastructure would be easier in Australia if the government relaxed regulations that barred firms from employing overseas workers at less than Australian minimum wages, Ms Rinehart said.
“It won’t matter so much to Australians what the guest labourers get if they’re employed at worldwide conditions,” she said.
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