Australasian Resources managing director Andrew Caruso believes the Foreign Investment Review Board (FIRB) proposal to cap foreign investments in underdeveloped projects will not pose too many problems for its Balmoral South Iron Ore Project.
The project was approved from the Western Australian Environmental Protection Authority (EPA) on Monday and is awaiting final clearance from Environment Minister Donna Faragher.
Caruso told MINING DAILY yesterday he anticipated the Minister would expedite the approval, meaning the company could turn its attention to securing finance.
“The project’s capital is estimated at around $3 billion and the mine has an expected lifespan of 25 years,” he said.
“We now require an off-take partner that can guarantee the purchase of iron ore for the duration of that period.
“Once that is established, we will look at project financing.”
According to Caruso, the company ideal partner would both purchase the iron ore as well as supply project finance.
“We are still in with several Chinese state-owned enterprises,” he said.
“There is a continuing strong interest in the project.
“The EPA approval gives added confidence to those potential investors, so this will allow us to progress those discussions further.”
According to Caruso, the proposed 15% cap on foreign investment in majors and 50% cap on smaller projects did not rule out securing the capital for the project.
“I don’t necessarily see the rules will be restrictive to taking over 15%, because there are a number of criteria that FIRB considers,” he said.
“If we need to go down that path, we would need to look at the overall proposal to see if it is in the interest of the company and shareholders and that it provides the catalyst to get the project running.
“There has been interest from other parties to take additional equity in Australasian.
“There is nothing concrete in that regard and, if necessary, we will certainly get the appropriate advice and take it forward.”
Caruso said a project of its size would require foreign investment and also made sense, given that any off-take partners would most likely be based overseas.
“If we were to get an off-take partner that didn’t want to supply project finance, we need to secure third-party equity and debt, in the same way Fortescue did a few years back,” he said.
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