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Partners: Prime Minister The Hon. Julia Gillard watches on as Gindalbie Metals Chairman George Jones and Chinese Premier Wen Jiabao sign a finance agreement for Karara iron ore mine.
Partners: Prime Minister The Hon. Julia Gillard watches on as Gindalbie Metals Chairman George Jones and Chinese Premier Wen Jiabao sign a finance agreement for Karara iron ore mine.

Gindalbie Metals celebrated significant milestones this week with signing of key debt financing and land access agreements for its Karara project.

Karara Mining entered into land access agreements with Morawa Shire Council, handing over 500 acres (202 hectares) of agricultural land to the community.

The land, bought by Karara for the construction of its rail easement, will also be used for community fundraising activities.

Morawa shire president Karen Chappel said the land would allow groups to grow crops to contribute to community funds.

Earlier this week, executives from Australian Gindalbie Metals met with Karara Mining’s project partner Ansteel in China.

Prime Minister Julia Gillard and Chinese Premier Wen Jiabao witnessed the signing of loan agreements.

US$336 million was granted to support increases in the capital working requirements at Karara, following a rise in the project’s loan facility.

A further US$300 million in bank guarantees was provided to fund rail infrastructure from Morawa to Geraldton.

Karara’s loan facility blew out past its original US$1.2 billion in May 2010, as working capital requirements rose to US$430 million.

Karara Mining managing director Tim Netscher said signing of the Facility Framework Agreement marked an important chapter in Karara’s development.

“The Karara project is now almost in the home stretch following the recent commencement of hematite exports and the advanced stage of the magnetite development,” he said.

“The increased project loan facility will support the previously announced $430 million working capital requirements for the Karara Project.

The Karara project, located 200km east of Geraldton, is one of the largest resource projects under construction in Australia.

Karara’s first shipment of hematite left Geraldton Port in March, with the company’s magnetite operation in development.

CLAIRE TYRRELL