Resourcehouse gets China funding boost

SYDNEY: Chinese investors will make US$1.8 billion extra available to Australian miner Resourcehouse, director Clive Palmer said Tuesday, ensuring projects proceed despite scotched plans to float.

Palmer, one of Australia's wealthiest men, said China's Exim Bank had boosted an existing credit facility by $1.2 billion to support the China First coal mine in Queensland while allowing it to access a further $600 million.

Resourcehouse abandoned plans for a US$3.6 billion float on the Hong Kong stock exchange at the weekend citing unfavourable global conditions, prompting market and media speculation about the mine's future.

But Palmer insisted that China First, a massive project with plans for six mines, processing facilities, a new export port and about 400 kilometres (250 miles) of railway, had "strong financial and government support."

"After closing off the IPO as a result of volatile market conditions, we are still in a position of strength to advance this project," Palmer said in a statement obtained by AFP Tuesday.

"Within 24 hours we have secured an extra $1.2 billion in funding coupled with the ability to access a further $600 million for equity."

Palmer said the funding, which will also go towards an iron ore development in Australia's resource-rich west, was a "very, very good vote of support by the Exim Bank of China and also by the Chinese government."

"We have struck back quickly with a deal which ensures the project's viability and puts to rest the unfounded criticism of some media and analysts," he added.

A number of international companies have also expressed interest in investing in Resourcehouse directly for equity, Palmer said, "giving us confidence that we will fully fund the project".

The unprofitable miner had planned to sell 5.716 billion shares for between HK$4.48 and HK$4.93 each (58-63 US cents), with a June 10 listing on the Hong Kong exchange which already had been delayed three times since 2009.

Copyright AFP (Agence France-Presse), 2011