The West

More Roy Hill up for grabs
More Roy Hill up for grabs

Gina Rinehart's Hancock Prospecting has added fuel to speculation of a funding-led delay to its $10 billion Roy Hill development by calling for more equity investors.

Amid doubts over the debt component of the massive deal, Mrs Rinehart's company sold 30 per cent of the 55 million tonne-a-year Pilbara mine, rail and port project to overseas investors this year. These included Korean steel giant POSCO, Japanese trading house Marubeni and a smaller stake to China Steel Corporation. Industry watchers had assumed Mrs Rinehart would stop at that level to retain majority control of 70 per cent and borrow the rest.

But amid falling iron ore prices, and doubts about banks' willingness to lend money, Hancock Prospecting chief development officer John Klepec said the company was open to selling off more of the project to equity investors.

"At the end of March we concluded the delayed but essential equity arrangements for the development of Roy Hill and welcomed our joint venture partners to the Roy Hill Project," Mr Klepec said in a speech on Wednesday night.

"There is still some opportunity for further equity investors, so don't hesitate to approach us."

Mr Klepec was speaking at the Diggers & Dealers forum, where he accepted Hancock's Dealer of the Year award for its Roy Hill deals in March.

Roy Hill chief executive Barry Fitzgerald said last month the company aimed to secure funding approval this year with financial close early next year, and was targeting first ore in 2014.

Mr Klepec gave an insight into how difficult financing transactions are at the moment.

"Mrs Rinehart achieved this investment, without any investment bank assistance, without Federal Government assistance and despite the negativity of (the mining tax), carbon tax and inner city media," he said. "It has not been easy to get major investment in the current climate."

Separately, Hancock - the only company to ink an enterprise migration agreement (EMA) with the Federal Government - yesterday appointed national workforce services company Skilled to canvass interest from jobseekers for Roy Hill. In an apparent response to a backlash over its plans to import up to 1700 foreign workers via the EMA to help fill a total of about 8500 positions during the construction period, Mr Fitzgerald said Skilled would aim to give contractors a ready pool of local workers.

Michael Evans, a CLSA analyst, has estimated the chances of Roy Hill hitting its end 2014 production date at less than 20 per cent.

The West Australian

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