Roy Hill investors stump up $624m
Shareholders in Gina Rinehart's Roy Hill project have tipped in a further $624 million in recent months, in a bid to keep the project going until debt funding can be secured.
The extra payments were described in Roy Hill's annual results, which were published by ASIC in the past 24 hours.
The iron ore project, which is being developed by Rinehart in partnership with Korean steel giant Posco, Japan's Marubeni and China Steel, had hoped to have its $US7 billion ($7.4 billion) debt package secured by March. But that process is still under way, meaning joint venture partners were asked to pay further instalments on their stakes sooner rather than later.
"The directors resolved that further calls on partly paid shares be made sufficient to meet existing current commitments in order to progress project activities," the company said its full-year results.
"In the quarter ended 30 September, 2013, call notices totalling $624,000,000 were made and paid by shareholders."
Mrs Rinehart's main company, Hancock Prospecting, will own 70 per cent of the project. The debt package is expected to include $US3 billion from commercial banks, and the organisation does much of its banking with NAB. A further $US4 billion is expected to be supplied by the export credit agencies of nations such as South Korea, the US and Japan.
Roy Hill reiterated that securing the debt package was central to the project taking the next step.
The debt is planned to be finalised before Christmas, and first ore shipped before the end of 2015.
JPMorgan recently predicted that Roy Hill would go ahead, but with a minimum six-month delay.
"In our view, a debt package of that order of magnitude may be difficult to secure without a further potential sell-down of the project," it said in a research note.
Mining companies often record several years of losses before they come into production, and Roy Hill has proved no different, reporting a loss of $315 million in the latest year.
Hancock Prospecting is a shareholder in Fairfax Media, the publisher of the Herald.