South Korean engineering and construction giant Samsung C&T today said that it has bagged a A$5.59 billion ($5.86 billion) order to develop Australian billionaire Mrs Gina Rinehart controlled Roy Hill iron ore project.
Under the deal with Roy Hill Holdings Pty Ltd, Samsung C&T, which has built the Burj Khalifa in Dubai, will build infrastructure for the Roy Hill iron ore project, including a plant that can process 55 million tons of iron ore annually, a 340-km railroad, and port facilities that include two berths and container yards.
Construction will start in early April and be completed by November 2015, the Seoul-based company said in a statement.
Rinehart's Hancock Prospecting owns 70-per cent of Roy Hill Holdings, while the remaining is held by a consortium that includes South Korea's Posco (12.5 per cent) and STX Corp (2.5 per cent), Japanese trading company Marubeni (12.5 per cent) and Taiwan's China Steel Corporation (2.5 per cent).
In March 2012, the consortium jointly acquired 30 per cent of Roy Hill Holdings for A$3.2 billion.
Posco had originally acquired 15 per cent, but in April 2012 sold 2.5 per cent of the stake to China Steel Corp for $316.7 million.
The investment will give the consortium a combined 16.5 million tonnes of iron per year from the mine.
The entire development of Roy Hill project is expected to cost around A$10 billion and Hancock is currently talking to a number of financial institutions to raise around $7 billion for funding the project.
The Roy Hill project is a giant-sized, low-phosphorus iron ore deposit located in the Chichester Ranges of the Pilbara region of West Australia. Hancock holds five tenements collectively referred to as Roy Hill 1 since 1993.
Located in one of the world's premier iron ore provinces, which currently exports more that 300 million tonnes annually, the Roy Hill deposit holds more than 2.4 billion tonnes of low phosphorous iron ore resources.
Hancock has already spent around A$100 million on PFS study, feasibility study and drilling work on the project. The infrastructure also includes building a rail line from the project site to Port Headland that will operate eight trains per day.
Once operational, Roy Hill targets to produce 55 million metric tons of iron ore a year.