Another Chinese company has made a major investment in Australian resources, with Moly Mines last night announcing a US$700 million agreement with its Chinese investor Hanlong Mining.
Under the terms of the deal, Perth-based and Toronto-listed Moly will arrange a US$500 million debt funding to in order to develop its Spinifex Ridge molybdenum/copper project in Western Australia, which the company says may be up and running in mid-2010.
Moly will also receive US$200 million in equity and debt funding, which is in addition to its recently announced institutional placement and share purchase plan.
According to Moly, the new investment will enable the company to repay all outstanding debts to the Trust Company of the West interim financing facility.
“This agreement represents a wonderful opportunity for Moly Mines to clear the company’s existing debt and build the Spinifex Ridge molybdenum/copper project,” Moly chief executive Dr. Derek Fisher said.
“The agreement will deliver shareholders the value benefits of a substantial funding package and a major project partner with a strong balance sheet, diversified operations and mining interests.”
The size of the agreement means Hanlong will gain majority control of Moly with a 54% stake, which could represent a hurdle in the form of the Foreign Investment Review Board (FIRB).
FIRB has recently made it clear that it would prefer to cap foreign interest in Australian companies at 49.9%.
China Nonferrous Metal Mining last month pulled out of a $500 million investment deal with Lynas Corporation after FIRB wanted its proposed 51.6% stake reduced to less than 50%.