By Shani Raja and Jesse Riseborough Feb. 6 (Bloomberg) — Resourcehouse Ltd. , the iron ore and coal company controlled by Australian billionaire Clive Palmer , said it’s secured Australia’s largest export contract, worth $60 billion. The company reached a 20-year sales agreement with one of China’s largest power companies, China Power International Development Ltd., the flagship company of China Power Investment Corporation, Resourcehouse said today in an e- mailed statement that cites comments by Palmer. “This deal with CPI is Australia’s biggest export contract,” Palmer, 55, is quoted as saying in the release. The contract involves Resourcehouse’s proposed China First coal mine and infrastructure project in central Queensland state. Palmer, Australia’s fifth-richest man, aims to raise as much as $3 billion in a Hong Kong initial sale of shares in Resourcehouse, which plans to spend A$10.2 billion ($8.9 billion) to develop two mines in Australia. The company aims to supply coal and iron ore to steel mills and power companies in China, challenging producers such as BHP Billiton Ltd. According to today’s press release, Palmer said he’d awarded Queensland’s largest engineering and construction- management contract, worth more than $8 billion, to Metallurgical Corp. of China Ltd. Job Creation “There will be a huge flow-on of employment from both the construction phase through to operation of the mine, port and rail,” Resourcehouse’s Executive Director Phil McNamara is quoted in the release as saying. “There is a potential to create 50,000 to 70,000 indirect jobs in Queensland.” Metallurgical Corp. signed an accord to buy $200 million of shares in Resourcehouse on Feb. 3. The Chinese company will own no more than 5 percent of the company, and also agreed to take a 10 percent stake in the China First coal project. China, the world’s largest consumer of coal and metals, last year announced $32 billion of resource acquisitions to fuel the world’s fastest-growing major economy. The Export-Import Bank of China confirmed it’s agreed to lead financing for the coal project, today’s release said. Thermal Coal Resourcehouse has the right to mine 1.4 billion tons of soft thermal coal at China First, in the Galilee Basin in Australia’s Queensland state, Macquarie analyst Andrew Dale said in a Nov. 6 report. Palmer completed the acquisition of Waratah Coal Inc. in April for about C$98 million ($93 million) to gain control of the project. China First, scheduled to start operations in the second half of 2013 and produce as much as 40 million tons a year, may become one of the world’s largest exporters of power station coal, Macquarie said. The bank values the project at between $4.2 billion and $4.9 billion. China’s demand for coal, used to generate about 80 percent of the nation’s power, has jumped as the government’s 4 trillion yuan ($586 billion) stimulus spending drove economic growth in the third quarter to the fastest pace in a year. Resourcehouse also has the right to mine 10 billion tons of iron ore in the Pilbara region of Western Australia and has the potential to become the world’s fourth-largest iron ore producer, Macquarie said. The company’s directors include Zhengrong Shi, chief executive officer of the world’s largest maker of silicon solar panels, Suntech Power Holdings Co. , and former Australian Foreign Minister Alexander Downer. Its other interests include oil and gas in Australia and Papua New Guinea, Macquarie said. To contact the reporters on this story: Shani Raja in Sydney at sraja4@bloomberg.net . Jesse Riseborough in Melbourne at jriseborough@bloomberg.net .
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Palmer’s Resourcehouse Wins $60 Billion Export Deal, `Australia’s Largest’
By Jesse Riseborough and Heidi Couch Nov. 23 (Bloomberg) — Billionaire Clive Palmer would consider sharing port and rail lines with Australia’s richest woman Gina Rinehart to cut the combined A$15 billion ($14 billion) cost of their two Queensland coal projects. “If she’s got a couple of billion dollars and she’d like to put it down on the table, we’re happy to share infrastructure,” Palmer, 55, said in an interview in Brisbane, adding he hasn’t had talks with Rinehart. “If she hasn’t got the cash we’ll have to wait until she gets it.” Palmer and Rinehart are seeking to fund coal and iron ore projects in partnership with Chinese state-owned enterprises to tap surging demand after iron ore and thermal coal prices tripled this decade. Palmer is seeking as much as $3 billion in the initial public offering of Resourcehouse Ltd. in Hong Kong. Resourcehouse is aiming to start building the China First coal mine, port and rail project in the Galilee Basin in Queensland next year and has agreed sales accords with Metallurgical Corp. of China Ltd., which will also help arrange financing. “China First coal has got the right to mine 1.4 billion tons of coal, which is enough to keep Hong Kong fires burning for the next 20 to 40 years,” Palmer said in the Nov. 20 interview. “That’s just the beginning.” Rinehart’s Hancock Prospecting Pty. is seeking to start a coal project in 2012 and has sought Chinese partners to help develop it. Hancock director Tad Watroba couldn’t immediately be reached for comment. Initial Offering Palmer has been gauging demand for a $2 billion to $3 billion Hong Kong IPO for Resourcehouse being managed by UBS AG and Macquarie Group Ltd., according to a preliminary share sale document e-mailed to fund managers Nov. 9. It’s in talks with Export-Import Bank of China for A$5.5 billion in debt funding for the coal project and has signed sales accords with unidentified Chinese state-owned power companies, Palmer said. China Metallurgical has agreed to buy a 10 percent stake in the project for between A$700 million to A$800 million. It’s also agreed to purchase 75 percent of the estimated 40 million tons a year in sales from the mine, he said. Palmer, Australia’s fifth-richest and chairman of Resourcehouse, was the only person in the top-10 of Business Review Weekly Magazine’s annual rich 200 list whose wealth increased last year. Palmer’s fortune more than doubled to A$3.4 billion, according to the list that was published in May. He also owns the Gold Coast United soccer club . Richest Woman Rinehart is chairwoman of closely held Hancock, founded by her father Lang who discovered the mines that made Australia the world’s biggest iron ore exporter. She is Australia’s fourth richest person with an estimated wealth of A$3.5 billion. Hancock’s Alpha mine is estimated to produce 30 million tons of power station coal a year for at least 30 years and the project is estimated to hold in excess of 3.5 billion tons of the fuel, according to a presentation on Hancock’s Web site. The railroad is estimated to cost A$2.5 billion, the mine will cost A$3 billion and the port will cost A$2.5 billion. Macquarie said in a Nov. 6 report the China First mine is estimated to cost A$3.4 billion, rail A$2 billion, port and infrastructure at A$1.8 billion and other project costs at about A$300 million. Resourcehouse’s potential IPO comes as United Co. Rusal, the world’s largest aluminum maker, studies raising as much as $3 billion in a Hong Kong IPO by December, two people familiar with its plan said last month. Investor Response “If there is going to be an IPO in Hong Kong we will have to get a good response from investors to raise the sort of funds that we will need to do in the public market,” Palmer said. Palmer is seeking to tap investor demand for coal and iron ore producers after the Bloomberg World Mining Index almost doubled this year because of a rebound in demand for commodities , driven by China. This quarter may be the busiest for Hong Kong IPOs since the U.S. subprime-mortgage market collapse triggered a global stocks rout in 2007. “We’ve been very successful doing deals outside IPOs and extracting good value,” Palmer said. “To be attractive an IPO has got to be able to be a better financial alternative. I’m not sure whether they are or not at this stage.” To contact the reporters on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net ; Heidi Couch in Sydney hcouch@bloomberg.net .
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Palmer Open to Talks With Rinehart on $14 Billion Australian Coal Projects
