Roy Hill venture poised to get billions in offshore financing
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 also 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 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 that 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 this year, and had spent the past month taking further comment.
It was reported earlier this year that American iron ore miners were unhappy with the prospect of a foreign producer winning help from US 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 of 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 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 venture is a massive iron ore project involving a joint venture between Hancock Prospecting, POSCO, Marubeni, and China Steel Corporation. It's significant due to its large scale and the substantial offshore financing it is poised to receive, which could impact global iron ore markets.
The key players in the Roy Hill project include Gina Rinehart's Hancock Prospecting, Korean steel giant POSCO, Japan's Marubeni, and China Steel Corporation. These companies have partnered to develop this large-scale iron ore venture.
The Roy Hill project is expected to receive close to $US7 billion in financing, with $US4 billion coming from export credit agencies and nearly $US3 billion from commercial banks like ANZ and NAB.
Export credit agencies from the US and Korea are on the verge of approving billions of dollars in loans for the Roy Hill project. These agencies provide crucial financial support that helps facilitate international trade and investment.
The US Export Import Bank's decision is important because it represents a symbolic and public endorsement of the Roy Hill project, although Asian banks are considered more influential in the overall financing negotiations.
Some American iron ore miners have expressed concerns about a foreign producer receiving financial support from US taxpayers. However, these concerns have been contested by representatives from states with significant economic ties to the project.
US companies like Caterpillar benefit from the Roy Hill project as they supply equipment, such as trucks, to the venture. This creates economic opportunities and supports jobs in states where these companies operate.
The Roy Hill project is expected to cost close to $US10 billion, covering the development of the mine, port, and rail infrastructure necessary for its operation.
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