China's MCC in $5.15-billion coal mining pact with Australia's Waratah

28 May 2009

Australia's Waratah Coal Pty Ltd. announced in Brisbane yesterday that it has entered into a deal with China's Metallurgical Group Corporation (MCC) for developing the country's largest thermal coal mine in Queensland at a cost of $5.15 billion (A$6.6 billion).

MCC, together with Chinese financial institutions, will provide up to $3.6 billion, which is about 70 per cent of the total project cost.

The massive project known as ''China First'' in the Galilee Basin south-west of Mackay in central Queensland is planned to produce around 40 million tonnes of coal per annum, three-fourths of which will be purchased by MCC, under a long-term contract.

Australia's resources magnate Clive Palmer, the company chairman, said, ''MCC has agreed to be the engineering, procurement and civil (EPC) contractor of the project by providing a fixed price, lump sum construction price for the entire project.''

Palmer said that MCC has agreed to arrange debt funding of up to 60 per cent of the total capital cost, estimated at $3.1 billion from Chinese banks in addition to providing around $515 million for 10 per cent of the project.

The total project involves construction of a large mining operation including six coal mines, 490 km railway line from the township of Alpha to the export port facility at Abbot Point and a two-berth 350,000 DWT terminal at Abbot Point.