Australia's Resourcehouse said on Saturday it had secured a deal worth $60 billion to supply coal to Chinese power stations over a 20-year period, calling it Australia's largest ever export contract. Company Chairman Clive Palmer said that coal mined in Queensland state from a major new project would be sold to China Power International Development Limited, a unit of China Power Investment Corporation (CPI).
"This deal with CPI is Australia's biggest ever export contract," Palmer said in a statement. Executive Director Phil McNamara, who helped broker the deal, said the contract with CPI was to supply 30 million tonnes annually over 20 years, with an approximate value of $3 billion per year.
The announcement comes ahead of an expected IPO in Hong Kong in March which is thought likely to raise up to $3 billion for Resourcehouse. The coal will come from a new $8 billion mining project in central Queensland, under development by Resourcehouse subsidiary China First Pty Ltd, which will establish a second major thermal coal mining region in Australia, alongside the Hunter Valley in New South Wales state.
The China First project will be located in the Galilee Basin region near Alpha, west of the town of Emerald, and will include four underground mines, two surface mines, plus associated handling and processing facilities. It will be linked to a coal terminal on the Queensland coast at Abbot Point by a new 490 kilometre railway line. The company says the project, which is awaiting final approval by the Queensland government, will create 6,000 jobs during construction and 1,500 when operational.
Resourcehouse said it had also awarded a $8.013 billion contract to Metallurgical Corporation of China Ltd (MCC) to build the mine and associated export infrastructure. Working with MCC will be Sino Coal International Engineering Group. China Communications Construction Company (First Harbour) and China Railway Group Limited (CREC).
Export-Import Bank of China has agreed to finance the bulk of the project's costs, to the tune of $5.6 billion, Resourcehouse said. The Resourcehouse Hong Kong IPO had been delayed in November after regulators requested more information about the project, a source told Reuters in November. Resourcehouse's board of directors includes Suntech Power Holdings Co Ltd Chairman Zhengrong Shi and Australia's former foreign minister Alexander Downer.
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