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K-sure, Eximbank join Australia mine project

Two state-run export credit agencies ― K-sure and Korea Eximbank ― will offer $2.2 billion to finance the Roy Hill project, a $12 billion iron ore mine and related-infrastructure development scheme in the Pilbara region of western Australia, K-sure announced on Sunday.

The project attracted $4.55 billion from five export credit agencies from Korea, Japan and the U.S. Among these agencies, K-sure led with $1.2 billion in financing, followed by Korea Eximbank with $1 billion.

“The decision was made in line with the government’s policy to make financial investments in a natural resource development project overseas linked to infrastructure development, which will lead more Korean firms to join the project,’’ the company said.

POSCO is also involved in the Roy Hill project as an investor with a 12.5 percent stake in the project. Under the investment deal, POSCO will secure 150,000 tons of iron ore from the mine per year when the project is completed.

Samsung C&T will join the project as an engineering, procurement and construction (EPC) contractor to build an iron processing plant, a port and rail infrastructure between the mine and an adjacent region.

“The Roy Hill project will become a model partnership between local builders and export credit agencies for high-value-added projects overseas,’’ K-sure CEO Kim Young-hak said.

Previously, local builders had sought EPC orders overseas, but they are turning to project financing-based projects for better returns.

“We will further enhance partnership with local private financial institutions to offer the best financing solutions for PF-based development projects overseas,’’ Kim said.

Last Tuesday, K-sure also offered a $400 million loan guarantee for the Saudi government’s Jeddah project, involving the construction of a power plant with a 2,640-megawatt capacity. Hyundai Heavy Industries will serve as an EPC contractor in the project.

By Seo Jee-yeon (jyseo@heraldcorp.com)
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