Gindalbie Signs Karara Loan Deal With Chinese Banks

China To Provide $1.2 Billion Loan

China Development Bank Corp. and Bank of China Ltd., have agreed to provide most of a $1.2 billion loan to Gindalbie Metals Ltd. to develop its Karara iron ore mine in Western Australia.

Gindalbie, which is developing the mine in a joint-venture with China’s Anshan Iron and Steel Group (Ansteel), said on Friday that it has signed a mandate letter with the banks for a 12-year loan facility. Conditions will be finalised by 30 June. The project loan facility will be secured against the Karara project and the shareholders’ shares in the joint venture project vehicle, Karara Mining Limited.

Last month Gindalbie and Anshan signed an agreement estimated to be worth $65 billion for the Chinese steelmaker to buy the whole of Karara’s output over the life of the mine. The mine is expected to begin production next year with output estimated at 30 million tonnes a year.

Gindalbie Managing Director Garret Dixon said in a statement that the loan is based on the US six-month London Inter-Bank Offer Rate (LIBOR) without giving details of the margin.