http://www.theaustralian.com.au/business
GINA Rinehart’s Hancock Prospecting has rejected speculation that Korea Development Bank is planning to buy a 5 per cent stake in the magnate’s flagship $10 billion Roy Hill iron ore project in the Pilbara.
A report published yesterday by a Seoul-based industry journal said the state-owned bank was planning to purchase the stake in partnership with Korean pension fund firms and insurance companies for 170 billion won (about $180 million).
The market value of Roy Hill is likely to have slumped in recent months given the weaker outlook for iron ore prices, which have plunged to $US82 a tonne, although the low-cost Roy Hill project would still be profitable at current prices. The report in the Korea IT Times appeared to suggest that Korea Development Bank would buy the stake from Hancock Prospecting.
“There is absolutely no truth to the report,” said a spokesman for Hancock Prospecting, Mrs Rinehart’s private company. Hancock Prospecting owns 70 per cent of Roy Hill, while Japan’s Marubeni has 15 per cent, South Korea’s Posco holds 12.5 per cent and Taiwan’s China Steel Corp has 2.5 per cent.
Sources said Posco would be an unlikely seller of its stake after chief executive Oh Joon-Kwon last month praised Roy Hill as a key asset for the Korean company.
“I am really proud of the systematic and smooth progress we have achieved in this large-scale mining project, particularly given its incalculable reserves,” he said after a visit to the site.
“The Roy Hill mine is Posco’s most important asset for raw materials, and Posco will provide unwavering support with the remaining construction.”
The South Korean report said Korea Development Bank would purchase the 5 per cent stake in Roy Hill Holdings by forming an “overseas resource development fund” with other Korean institutional investors.
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