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China nerves delay hanlong usd 1.3 billion australia iron ore bid by efwegbe erergeer
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China nerves delay hanlong usd 1.3 billion australia iron ore bid |
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Business,Business News,Business Opportunities
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Reuters reported that Hanlong Mining and Sundance Resources haveagreed to delay to November the target date for the Chinese firm toseal a AUD 1.34 billion takeover of the Australian group as Hanlongis struggling to line up funding from China. The long delay on the deal, first announced last July is the latestevidence of China's reluctance to make big bets on risky resourcesprojects offshore amid uncertainty over the pace of economic growthat home. Global markets have been rattled by signs of slowing growth in theworld No.2 economy which is hurting demand for commodities and ledPremier Mr Wen Jiabao to push forward key investment projects torevive growth. Hanlong wants Sundance for its USD 4.7 billion Mbalam iron oreproject on the border of Congo and Cameroon in western Africa, seenas a major new source of iron ore that could diversify China'sdependence on Australia and Brazil.
The project, which includes building a 510 kilometers rail line anda deep water port, has yet to secure key approvals expected monthsago from the two governments and financing from the ChineseDevelopment Bank. China's ambassador to Australia recently said the difficulties ingetting big projects up and running in a rising cost environmenthave made Chinese companies and their lenders hesitant to make bignew investments. Mr Chen Yuming told Reuters in an interview earlier this month that"So particularly given the current situation in the world economicand financial situation, there are still some uncertainties, so Ithink that companies will emphasize more caution and be morecareful in making such investments." Mbalam is expected to produce 35 million tonnes a year of iron ore.This compares with a forecast 55 million tonnes this year fromAustralia Fortescue Metals Group the world number four ironproducer. Hanlong which owns 18.6% of Sundance, had hoped to line up backingfor the takeover from the China Development Bank last November, buthas now pushed the deadline for that funding out to August 31.
The revised scheme implementation agreement was agreed followingdiscussions with the governments of Congo and Cameroon as well asChina's National Development and Reform Commission and the ChinaDevelopment Bank. Mr George Jones Sundance Chairman said in a statement that "Itreflects the substantial progress made in discussions in recentweeks, the strong desire of all the parties to finalize the SIA andtheir resolve to do it as efficiently as possible." He said they now hope to complete a deal by mid-November, havingnow established a clearer understanding of the needs of China'sNational Development and Reform Commission and Hanlong'sfinanciers, the China Development Bank. Source - Reuters. I am an expert from Dried Flowers, usually analyzes all kind of industries situation, such as creative outdoor advertising , alternative outdoor advertising.
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