SG CIB closes the financing of Roy Hill iron ore project, the largest mining finance deal in Australia
Societe Generale Corporate & Investment Banking (SG CIB) acted as one of the Mandated Lead Arrangers in the US$7.8 billion financing for the Roy Hill iron ore integrated mine, port and railway project in the Pilbara region of Western Australia (“Project”)*, the world’s largest project financing for the development of a greenfield mining project to date.
A strong team from SG CIB with experts from natural resources & metal and mining finance, infrastructure finance and export finance was heavily involved in supporting this landmark project.
The Roy Hill Project is being developed by a strong group of sponsors with financial strength and iron ore experience, including Hancock Prospecting Pty Ltd (70%), Marubeni Corporation (15%), POSCO (12.5%) and China Steel Corporation (2.5%) – most of which are also off-takers.
The USD7.8m debt package raised to finance this greenfield project is split into a USD7.2bn commercial facility and a AUD600m revolving facility for working capital. 19 financial institutions, including SG CIB, committed to the USD2,565m commercial loan, which includes a RMB tranche provided by Bank of China and Industrial & Commercial Bank of China for equipment from China. The balance came from covered and direct loans provided by export credit agencies Japan Bank for International Cooperation (JBIC), Korea Trade Insurance (K-Sure), Export-Import Bank of Korea (KEXIM), Nippon Export & Investment Insurance (NEXI) and Export-Import Bank of the United States (US EXIM).
Substantial support from the Sponsors also underpins the financing, including a substantial Subordinated Loan Facility to cover capex overruns and other funding shortfalls.
Roy Hill iron ore project has received many industry recognitions, including “Project Finance Deal of the Year (Overall) / Mining Deal of the Year” and “Project Finance Deal of the Year / Best Mining Deal for Australia” in The Asset Triple A Infrastructure Awards 2015, “The Best Project Finance Deal” in FinanceAsia Achievement Awards 2014 – Australia and New Zealand, “Asia-Pacific Deal of the Year” in PFI Awards 2014, “Best Project Finance Deal” in Asiamoney Australia Awards 2014, “Asia Pacific Mining & Metals and Asia Pacific Overall” in IJGlobal Asia-Pacific Awards 2014.
*For details of Roy Hill Project, please visit: www.royhill.com.au
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