This article just proves the analysts wrong once again. China can't get enough coal and RIV is a target because its got this sort of capacity as well...except RIV actually has COKING COAL and Thermal coal.
Feb. 6 (Bloomberg) -- Resourcehouse Ltd., the iron ore and coal company controlled by Australian billionaire Clive Palmer, said its secured Australias largest export contract, worth $60 billion.
The company reached a 20-year sales agreement with one of Chinas largest power companies, China Power International Development Ltd., the flagship company of China Power Investment Corp., Resourcehouse said today in an e-mailed statement that cites comments by Palmer.
This deal with CPI is Australias biggest export contract, Palmer, 55, said in the release. The contract involves Resourcehouses proposed China First coal mine and infrastructure project in central Queensland state.
Palmer, Australias fifth-richest man, may aim 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 todays statement, Palmer said he awarded Queenslands 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, Resourcehouses Executive Director Phil McNamara said in the statement. 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.
Weve got other companies who are interested in investing, sure, Palmer said today by telephone from Brisbane. Weve got a whole range of people from Europe, the United States, China, Japan, everywhere, all over the world, that want to be involved.
China, the worlds largest consumer of coal and metals, last year announced $32 billion of resource acquisitions to fuel the worlds fastest-growing major economy.
The Export-Import Bank of China confirmed its agreed to lead financing for the coal project, todays 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 Australias 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 worlds largest exporters of power-station coal, Macquarie said. The bank values the project at between $4.2 billion and $4.9 billion.
Chinas demand for coal, used to generate about 80 percent of the nations power, has jumped as the governments 4 trillion yuan ($586 billion) stimulus spending drove economic growth in the third quarter to the fastest pace in a year.
Iron Ore
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 worlds fourth-largest iron ore producer, Macquarie said.
The companys directors include Zhengrong Shi, chief executive officer of the worlds 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.
RIV Price at posting:
$6.89 Sentiment: ST Buy Disclosure: Held
