* Bankers, export credit agencies extend project evaluation
* Roy Hill chief misses long-scheduled speech
* Spokesman says response from lenders positive
By Sonali Paul
SYDNEY, Oct 16 Australian billionaire Gina
Rinehart's $10-billion Roy Hill iron ore project aims to start
construction on its Australian mine in mid-2013, later than
hoped, as assessments by potential lenders stretch into next
year, the project's spokesman said on Tuesday.
The Roy Hill partners, targeting 55 million tonnes a year of
iron ore, had aimed to start producing in late 2014, but funding
has taken longer to line up than expected, chiefly because of
the size of the project, which involves building a mine, railway
and port rather than just expanding an existing mine.
"It may be well into 2013 before this evaluation process is
complete," Darryl Hockey, the Roy Hill general manager of
external affairs, said at a mining conference.
Hockey spoke at the conference as the project's chief, Barry
Fitzgerald, cancelled a long-scheduled appearance. The company
declined to say why Fitzgerald did not attend, except for saying
it had nothing to do with meeting bankers, as the conference
host had said.
The project is 70 percent owned by billionaire Gina
Rinehart's Hancock Prospecting, and 30 percent owned by a
consortium led by South Korean steel giant POSCO,
with Japanese trading company Marubeni, South Korea's STX Corp
, and Taiwan's China Steel Corp.
IMPOSSIBLE TO PREDICT
The Roy Hill project owners hope to start construction
proper by mid-2013, Hockey said, with $2 billion already spent
or committed on preliminary work, including dredging at the Port
Hedland export point and building camps for workers.
He said even the mid-2013 target for construction was hard
to pin down, as financiers were being extra cautious following
the global financial crisis.
"It's impossible to predict target dates with absolute
certainty," Hockey said.
The project had received a good response from local and
international banks as well as export credit agencies, he said.
"So far the level of interest and the responses have been
"We're not uncomfortable with where we are," he later told
While competing iron ore projects were running into delays
and doubts, especially following the slide in iron ore prices to
$87 from a high of $149 this year, he said the Roy Hill project
was more robust.
"Compared to other companies we have a low cost structure
and an above-average product quality, so that stands us in
fairly good stead," Hockey said.
"The delay is not related to the recent volatility in iron
ore prices," he told Reuters.
Roy Hill and POSCO have declined to comment on reports that
POSCO has been appointed as construction contractor for the
The Roy Hill project had already run into delays in lining
up equity partners as a bitter dispute between Rinehart, Asia's
richest woman, and three of her children over control of a
multibillion-dollar family trust spilled into the courts. The
case is continuing.
Rinehart inherited valuable mining tenements from her father
and is a partner with Rio Tinto on the massive Hope
Downs iron ore project. Forbes this year estimated her fortune
at $18 billion.