Hancock Prospecting director Gina Rinehart has accepted an award naming Roy Hill the Finance Deal of the Year.
Roy Hill attracted the Project Finance International award for “bucking the trend” of mines financed on a corporate-finance basis, instead having successfully structured and developed the large scale project without requiring a full sponsor completion guarantee.
The project raised US$7.2 billion of financing debt from a combination of multiple export credit agency (ECA) and commercial bank involvement
FinanceAsia said the Roy Hill project was a new and innovative template for financing large scale mining projects with multiple ECAs.
Roy Hill on track at 60 per cent completion, and is expected to ship first ore in September 2015.
Winners of the awards were named in late December 2014.
Rinehart accepted the PFI award last week on February 5 at the Hilton Hotel in London, and gave the following speech at her acceptance ceremony:
The Hon Kelly O' Dwyer, the member for Higgins, representing the Prime Minister, distinguished guests, friends.
Thank you very much for this award and to Finance Asia for acknowledging Roy Hill with the award of Asia Pacific Project Finance Deal of the year and may I extend congratulations to all the other winners.
I'd hoped to have with me tonight Tad Watroba, he's been with me since before HPPL first applied for the Roy Hill tenements, and so he knows how hard it's been at times as we struggled to get to the point where we had taken most of the risks out of the project and could invite our partners and finance. He's in the cold in China, while I'm enjoying this happy occasion!
Mining is never as easy as some in the media want to imply, and wow is that an understatement.
It is never as they want you to believe – apply for tenements, and suddenly without effort or risk, or hard work, money flows. Nothing could be further from the truth!
Years of exploration in rugged and remote country is required, hard work, expensive studies, plus the enormous costs and risks of the thousands of government approvals, and that's just some of it.
Then after all this, if the project is economic, and many aren't, finding ways to finance it, which may require raising billions of dollars.
Some of our financing team are with us tonight, Garry Korte, our CFO, could you join me please?
Please may those team members present, Spiro Pappas of NAB, Bruce Spencer of BNPB and teams also stand?
Please join me in congratulating our very hard working team for raising the largest mainland mining project financing in the world. (Applause)
You know, anyone could have applied for tenements others chose to drop. The land was open for applications. They just didn't choose our path.
When I requested my company apply, our technical staff, consultants and executives were against it. They warned against in writing … after all, BHP so experienced in iron ore in the Pilbara, had dropped the tenements.
The ore found by BHP was only low-grade. Even after we successfully applied, advice continued "should drop.”
I was the youngest in the company at that time, but, I had my father’s enthusiasm for Northern Australia.
Today, we need to be considering, how do we achieve the next major project like Roy Hill?
Exploration is falling.
Fewer businesses are opening than at any time in the last decade.
In the realities Australia faces, it should be obvious onerous government regulations adding costs to business must be urgently reduced. It should be obvious that high cost Australia with its declining productivity, must be cost competitive overseas, or face losing markets and much needed revenue.
But this will remain wishful thinking, unless people like you here tonight let Australians know the realities, and that the mining and related industries etc can't afford greater government burdens.
We need to help our politicians explain why government burdens need to be reduced, which are hurting and delaying businesses and investment in this country – over regulation, onerous approvals, permits, licences and compliance, and, thanks to falling commodity prices, declining revenue, but while many talk about productivity, too few consider the time wasted by very costly and time-consuming government tape.
We are surrounded by examples from other countries.
Singapore beat Australia to become the next financial hub, despite our country having resources and the advantages of an English speaking, educated workforce.
Look at them now – over 100 major banks in tiny Singapore, and all the businesses and visitors and revenue that attracts.
Imagine where India will be with the leadership of Prime Minister Modi and his “red tape to red carpet” approach. Already extensively cutting regulations, and, raising living standards.
This is a critical time for our country, we need to give greater support to those who are willing to act, let’s give Australia a chance.
Many thanks again for this award – I truly hope there will be more awards in future for other great Australian projects and their financing.