Gindalbie To Raise $200m For Karara Project

Australian iron ore miner Gindalbie Metals Ltd is seeking up to $206 million to help fund the development of its $2 billion Karara iron ore project in Western Australia.

The capital raising will include a $111.8 million share placement to institutions and another placement with its joint venture partner and largest shareholder, China's Angang Steel Company Ltd (AnSteel), to raise between $63.2 million and $74.6 million.

Last month Gindalbie secured last month a $US1.2 billion ($A1.34 billion) loan facility with funds sourced mainly from China Development Bank and Bank of China.
Gindalbie said at the time that it had about $200 million in cash reserves remaining from equity payments totalling $534 million that have been contributed by Gindalbie and AnSteel to the joint venture company.

Mining is expected to begin in mid-2011.

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Queensland Rail To Transport Karara Iron Ore

Ten Year Deal To Freight Ore To Geraldton

Queensland Rail is to transport iron ore from Western Australian miner Gindalbie Metals's $1.8 billion Karara project to Geraldton port.

The rail operator, which moved into Western Australia in 2006, will announce on Monday that it has signed a heads of agreement with Gindalbie for a 10-year deal for 8 million tonnes of concentrate and 3 million tonnes a year of direct shipping ore with an option to take the whole of the 30 million tonnes a year that Gindalbie expects to produce at Karara.

The Karara project is a joint venture between Gindalbie and the Chinese steelmakers Ansteel. The first iron ore is expected to be produced next year.

"This is potentially one of the largest individual long-term contracts which will be awarded for the Karara Project, with a value of several hundreds of million dollars over the initial 10-year period," Gindalbie managing director Garret Dixon said.

Queensland Rail is expected to be privatised later this year.

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.

Gindalbie Iron Ore Price Dependent On 'Big Three' Negotiations

Iron Ore Junior Will Use Benchmark As Reference Price

Gindalbie Metals Ltd has said that the price it sells its iron ore to its Chinese joint-venture partner, will depend on the prices achieved by the industry’s big three global miners.

Speaking to Australia’s Sky News Business Channel on Sunday, chief executive Garret Dixon said "The best thing that we can do is to use their reference price, the prices they determine, as a reference price for our project. What we do as a small guy I suppose is ride on the back of the negotiations of the big guys out in the market. That's the way we have to play it.”

Production at the company’s Karara mine will be shipped to Chinese steelmaker Ansteel commencing next year from the port of Geraldton, 250 miles north of Perth in Western Australia. The two companies signed an agreement this week that could deliver nearly 900 million tonnes of iron ore over three decades once the Karara operation in Western Australia’s Mid West iron belt is running at full capacity in full swing.

Gindalbie Looking At 30 Million Tonnes A Year By 2020

Karara Mine To Commence Output In 2011

The managing director of Gindalbie Metals Ltd has told Reuters that he expects his company to triple iron ore production to around 30 million tonnes a year by 2020 from mining operations expected to start next year.

"We've got a plan to start producing in 2011 and by 2020 we will complete our ramp up to 30 million tonnes per annum," Garret Dixon said in an interview on Thursday. "We're starting at 10 million tonnes next year and will progressively increase after that," he added.

Production at the company’s Karara mine will be shipped to Chinese steelmaker Ansteel commencing next year from the port of Geraldton, 250 miles north of Perth in Western Australia. The two companies signed an agreement this week that could deliver nearly 900 million tonnes of iron ore over three decades once the Karara operation in Western Australia’s Mid West iron belt is running at full capacity in full swing.

Gindablie estimates that eight million tonnes of high-grade concentrate and two million tonnes of direct shipping ore will be produced at Karara in 2011.

A second larger port, proposed in nearby Oakajee, is needed to allow the company to maximise its production.

Gindalbie To Sell All Karara Output To Ansteel

Gindalbie Signs $65 Billion Iron Ore Contract

Gindalbie Metals Ltd., has agreed to sell all its production from the Karara iron ore project in Western Australia to its partner in the project, China’s Anshan Iron & Steel Group (Ansteel).

The magnetite iron ore project in the Mid-West region may produce more than 30 million tons annually for 30 years, the Perth-based company said in a statement today and the company put a value of $65 billion on total sales over the life of the mine.

"Stage one production, based on a rate of 8 million tons per annum, is scheduled to be commissioned in late 2011," the company said. "Based on the 2009 benchmark iron ore fines price and stage one production rate, the off-take agreement is worth approximately $580 million a year, increasing to more than $2.1 billion a year at the project's potential production rate."