China at the helm in billion dollar mining refinance

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Firms acting on the US$1.48bn refinancing of the Karara Iron Ore Project by Chinese investors are falling just short of declaring a renaissance in the Energy & Resources sector.
 
The refinancing by a Chinese policy bank has sparked confidence in the Energy & Resources sector, and while Nicholas Creed, lead partner on the deal at King & Wood Mallesons said it’s too early to declare a recovery of the sector, it’s certainly an encouraging sign.
 
The project is owned in a joint venture by an Australian subsidiary of Ansteel Group Corporation, China’s second largest steel producer and largest iron ore miner and Gindalbie Metals Limited.  China Development Bank Corporation and Bank of China Limited were both advised by King & Wood Mallesons on the refinancing, the firm has acted for the lenders and the security trustee of the Karara Iron Ore Project since the initial financing in 2010.
 
“I think it’s a demonstration of faith and a continuing commitment to the Australian resources market by Chinese companies and their banks, that they would refinance a project that has had some difficulties,” said lead King & Wood Mallesons partner on the deal, Nicholas Creed. 
 
“It shows us that it is a long term relationship and a long term investment that our Chinese investment partners are looking for, which mirrors the general trade relationship that we have with China, that it is a long term, mutually beneficial relationship.”
 
Acting for Ansteel Group Corporation was Norton Rose Fulbright with partner Jake Howard at the helm. 
 
“This was a big facility that required us to work around the clock between Melbourne, Perth and Beijing in order to achieve financial close within a very short timeframe,” said Howard.
 
Looking forward, Creed said Africa is the new frontier for the energy and resources sector, with many Australian and Chinese investors expressing interest there.
 
“The challenge for us Australian firms I think is to follow that investment flow and follow the client into those new markets,” he said.

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