Brisbane Forecasts
Richest Man in Australia Gamble China's economic
richest man in Australia last weekend has been a big step towards the largest coal mine in this nation rich in natural resources has never seen.
The question is whether global investors go along for the ride.
Clive Palmer, a businessman of 55 years, harness racing and amateur poet, on Saturday announced an agreement in which the Export-Import Bank of China will hold U.S. $ 5.6 billion U.S. $ 8 billion in financing it needs to build its planned megamine, dubbed "China first" in the State Queensland and Australia to meet growing demand from China for coal. China Power Investment Corp. has agreed to buy 30 million tonnes coal per year from the project for 20 years, which increases the chances of the mine will be developed.
If it is commissioned, the mine could have a significant impact on the $ 350 billion annual global coal market, with a projected production of 40 million tonnes per year for power plants. Analysts predict that China will import 90 million tonnes or more this year.
A green light for the project would also indicate a return of significant risk take in the commodity in the world. The mining company shelved the project when the global recession hit in 2008. While commodity prices have rebounded from the bottom of the last 18 months, many mining companies remain wary of reviving plans cost.
Mr. Palmer still needs to raise at least U.S. $ 2.4 billion, well.
He hopes to raise money by raising the shortlist Resourcehouse Ltd., Brisbane, Australia, company that controls the rights to China first. A bid that would be Resourcehouse made in Hong Kong last year has been delayed and is now expected next month.
China Metallurgical Corp plans to build the project and materials promoted by the State, the month of engineering and construction group last paid Mr. Palmer U.S. $ 200 million for a 4% in Resourcehouse.
Meanwhile, the Australian government has expressed its support, putting China first on a fast track for regulatory approval. Canberra has blocked or delayed some other Chinese mining investment last year for fear of China would be too clean industry naturalresources Australia.
But so far, these concerns were outweighed by the potential rise of China's development first. The proposed mine in central Queensland's Galilee Basin, is expected to result in scores of jobs in and rural Australia would probably remain undeveloped without Chinese capital.
The project faces significant logistical obstacles, however. The coal deposit is located 490 km inland, and analysts have said that the cost of building a network of railways for transport coal to a port in Queensland coast north-east will profit margins tighter than other Australian coal mines.
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