Three Chinese banks interested in Iron Road's Central Eyre Iron Project

China banking on Iron Road

THREE Chinese banks have formally lodged expressions of interest to fund the debt financing component Iron Road’s $US4 billion Central Eyre Iron Project. 

Iron Road stakeholder engagement principal advisor Tim Scholz said Iron Road was pleased the banks had shown significant interest in the project.

He said the banks – Industrial and Commercial Bank of China, China Development Bank and China Construction Bank – including the two biggest banks in the world, would finance the $US3 billion debt aspect of the project. 

The expressions of interest follow meetings with the banks in Beijing, Shanghai and Sydney over the past three months attended by Iron Road Limited and project development partner China Railway Group Limited.

Iron Road managing director Andrew Stocks said the company was pleased to have received formal indications of financing support from the three financial institutions, in addition to the equity interest from China Railway Group Limited (CREC).

“Significantly, the banks have also signalled that CREC is an important strategic partner given its status as one of China’s largest state owned enterprises.

“This is a key step forward towards the development of the CEIP.”

Mr Scholz said the China Railway Group had confirmed it would take about 50 per cent of the product (iron ore) each year from the completed mine.

“China Rail has confirmed its intentions to sign an off-take agreement for 10 million tonne concentrate yearly,” Mr Scholz said. 

The China Railway Group has supported the Central Eyre Iron Project since April 2016 with the China Railway Oriental International Construction Corporation, a subsidiary of the China Railway Group Limited providing $5 million worth of consultancy services during the Central Eyre Iron Project’s commercialisation phase.

Mr Scholz said all three institutions wanted to achieve financial close by December this year. 

Cleve District Council mayor Roger Nield said he had recently met with an Iron Road official who had advised him, pending the successful outcome of  government applications, works at the the mine, the infrastructure corridor (railway line) and proposed deep sea port at Cape Hardy, near Port Neill, would be underway within two years.

This story China banking on Iron Road first appeared on West Coast Sentinel.