Waratah Coal, Chinese Mine Partner Seek $3.1 Billion

By Jason Scott

May 27 (Bloomberg) -- Waratah Coal Inc., the Australian company proposing a $5.15 billion venture in Queensland, signed an agreement with China Metallurgical Group Corp. to seek funding for as much as 60 percent of the project.

An estimated $3.1 billion of “debt funding” will be sought from Chinese banks, the Brisbane-based company said today in a statement to the Australian stock exchange. China Metallurgical, a state-owned construction and resources exploration company, will be the project’s engineering, procurement and civil contractor, and will buy 30 million metric tons of coal a year, it said.

The project, named “China First” and described by Waratah Coal as Australia’s largest thermal coal mine, will create about 6,000 jobs during construction and employ 1,500 workers once operating, it said.

On May 22, the company said it had expanded proposed capacity at the Galilee Basin mine by 60 percent, giving it increased targeted annual capacity to 40 million tons.

The venture will comprise the mine, a 490-kilometer (305- mile) rail line and export terminal, with shipments due to start in the second half of 2013, making it Australia’s largest coal project, Waratah said.

Waratah was acquired by closely held Mineralogy earlier this year and its securities delisted from the Toronto and Australian stock exchanges in April.

To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net;