Rinehart's Roy Hill joint venture poised to get billions in loans
The Roy Hill decision is top of the agenda for Thursday night's meeting of the board of the Export Import Bank of the United States, which has previously indicated preliminary support for $US694 million ($774 million) of finance for Roy Hill.
There have been unconfirmed reports out of Asia that the Korea Exim Bank has approved $US1 billion of finance, with final decisions from similar agencies in Japan also expected to flow within days.
Roy Hill, expected to cost close to $US10 billion, is a joint venture between Ms Rinehart's Hancock Prospecting, Korean steel giant POSCO, Japan's Marubeni and China Steel Corporation.
Despite renewed speculation in Asia that the project could cost more, the partners are still expecting to raise close to $US7 billion for the mine, port and rail project, with $US4 billion from export credit agencies, and close to $US3 billion from commercial banks such as ANZ and NAB.
A spokeswoman for the US Exim Bank told Fairfax Media Thursday's meeting would involve the "final vote" on whether to fund Roy Hill, which has been open for review by US Congress for the past month.
The spokeswoman said the bank had received "a number of communications from members of Congress" on the Roy Hill decision earlier this year, and had spent the past month taking any further comment.
It was reported earlier this year that American iron ore miners were unhappy with the prospect of a foreign iron ore producer winning help from American taxpayers.
But those concerns were contested by representatives of states such as Wisconsin, where significant numbers of Caterpillar employees live.
Caterpillar plans to supply trucks to Roy Hill, just as it has already done for Fortescue, in the Pilbara.
Approval of the Roy Hill deal would add to the US Exim Bank's $US4.69 billion exposure to Australian projects, with at least two of the big Gladstone LNG projects previously winning funding.
Airline Virgin Australia has also won funding in the past, on the grounds that it buys aircraft from US manufacturer Boeing.
According to its recent annual report, the US Exim authorised $US298.3 million of loans, guarantees and insurance to Australian projects in fiscal 2013.
While approval from the US would be a symbolic and very public win for Roy Hill, it is not considered the most influential lender to the project, with the cluster of Asian banks dominating negotiations.
The US meeting is expected to get under way in Washington shortly after midnight Australian time.
Frequently Asked Questions about this Article…
The Roy Hill joint venture is a massive iron ore project involving Gina Rinehart's Hancock Prospecting, Korean steel giant POSCO, Japan's Marubeni, and China Steel Corporation.
The Roy Hill project is looking to secure approximately $US4 billion from export credit agencies, with additional funding expected from commercial banks.
Export credit agencies from the United States and Korea are involved, with the US Export Import Bank and Korea Exim Bank playing significant roles in the funding process.
The total expected cost of the Roy Hill project is close to $US10 billion, covering the mine, port, and rail infrastructure.
The US Export Import Bank's decision is important as it represents a symbolic and public win for the project, although Asian banks are considered more influential in the negotiations.
Some American iron ore miners have expressed concerns about a foreign iron ore producer receiving support from American taxpayers, although these concerns have been contested by representatives from states like Wisconsin.
Caterpillar plans to supply trucks to the Roy Hill project, similar to its previous involvement with Fortescue in the Pilbara region.
The US Exim Bank's approval of the Roy Hill deal would add to its $US4.69 billion exposure to Australian projects, highlighting its ongoing support for ventures like the Gladstone LNG projects and Virgin Australia.
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