Good Exposure in The Australian...

Good Exposure in The Australian today

http://www.theaustralian.com.au/business/mining-energy/koreans-chinese-do-battle-over-copper-project/story-e6frg9df-1226798535715

A TURF war has broken out between China and South Korea over gaining access to new Australian resources projects.
ASX-listed Rex Minerals is one of the first to benefit, with Korean conglomerate Hyundai angling to push aside the China Nonferrous Metal Industry (NFC) and win the engineering and construction contractor rights to Rex's planned $850 million development of the Hillside copper project on South Australia's Yorke Peninsula.

Hillside is one of the projects South Australia is banking on to help offset the economic blow of Holden leaving the state, and BHP Billiton cancelling a $30 billion expansion of its Olympic Dam copper-uranium mine.

Subject to Rex securing financing for the project, construction could start this year for first copper production in early 2016. Rex shares fell 1c to 54c yesterday, giving the company a market capitalisation of $102m. That reflects the magnitude of the challenge of getting Hillside into production, even with Hyundai on board.

Rex has signed up Hyundai under an early contractor involvement (ECI) agreement. The company already has a similar arrangement with NFC that was signed in June last year. NFC is still in the race for the project, but Rex managing director Mark Parry said the Chinese were being shown up by the eager Koreans.

Mr Parry said it had become clear in his discussions with the Koreans that they were "concerned that they have fallen behind China somewhat" in securing future metal supplies and work for their engineering and construction industries.

"Copper is very important to the Korean industry, and they want to make sure that they are having their share of the world pie," Mr Parry said.

He said it had also become clear that the pending free-trade agreement with South Korea had become a driving force in the desire to build a presence in Australia.

"NFC were first movers on this. Hyundai came to us later in the piece and we have been very, very impressed with the amount of people that they have mobilised on to the project and the amount of progress they have made to get to this stage," Mr Parry said.

"This is the first ECI agreement in Australia of this nature for Hyundai. Hyundai wants to use this project to showcase their expertise and competence in a project that is going to have high visibility in South Australia, so they can grow their business in SA and Australia generally, using alliance-type deals such as this with AMEC (Hyundai's partner in the ECI agreement).

"They are using this as the entry project. It is not big in terms of their experience and what they do, but starting on the right project and doing a good job is very important for them."

Mr Parry said the ECI agreement would get the Hillside project in front of South Korea's export credit agencies to start discussions about the debt requirement for the project.

"We think the debt will come together on this from a combination of Korean export credit agencies, and a consortium of Australian banks. Having Hyundai in the room with us makes a significance difference," he said. "We are also having discussions with large potential offtake partners in Korea around helping with the equity funding."

The Chinese are not out of the race yet. But Mr Parry said it was fair to say "they have fallen behind in terms of the timeline for the project". He said: "So for them to stay in the race, they have to lift their pace. They will get a letter from me today to alert them that this is happening. It is up to them now to see if they can move along a fair bit quicker."