clive palmer getting chinese funding for $5.5b, page-2

http://www.bloomberg.com/apps/news?pid=20601081&sid=a90Z1yI2ZCyU

Gindalbie Expects to Sign $1.2 Billion China Loan Early 2010
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Jesse Riseborough

Nov. 24 (Bloomberg) -- Gindalbie Metals Ltd., planning a A$1.8 billion ($1.7 billion) iron ore mine in Australia with Anshan Iron and Steel Group, expects to complete a $1.2 billion loan accord with China Development Bank Corp. by early next year.

“We are down to the lawyers detailed term sheet discussions, so we’ve got a letter of commitment from China Development Bank,” Chief Executive Officer Garret Dixon said today by phone from Perth. The accord may be signed by the end of this year, though more likely early next year, he said, adding that the terms of the loan are “very competitive.”

A $586 billion stimulus package and record growth in new loans have helped China lead the world out of recession. China, the biggest buyer of iron ore, imported a record amount of the ore this year to feed the nation’s steel mills and boosted investment in overseas resources to secure future supply.

Construction of the Gindalbie’s Karara mine and plant, 225 kilometers (140 miles) east of Geraldton in Western Australia state, started earlier this month and first production is due to start in mid-2011, Dixon said.

Gindalbie, 36 percent-owned by Anshan, advanced 0.5 percent to 93 cents at the 4:10 p.m. Sydney time close on the Australian stock exchange. The stock has jumped 58 percent this year and the company has a market value of A$658 million.

The Karara project has an initial annual capacity target of 8 million tons of magnetite ore and 2 million tons of so-called direct shipping, or hematite, ore which doesn’t require treatment before export. The company has flagged expansion to as much as 30 million tons a year which may cost an additional A$2 billion, RBC Capital Markets analysts said in a Nov. 15 report.

Magnetite ore has lower iron content than hematite and must be treated to make it suitable for steelmaking.

To contact the reporter on this story: Jesse Riseborough in Melbourne at [email protected]

Last Updated: November 24, 2009 01:22 EST