Australia-based iron ore producer Gindalbie Metals (Gindalbie) is seeking an equity raising to help fund a 30 percent increase in construction costs at its Karara iron ore project in Western Australia. Gindalbie stated that it expects to decide on its funding strategy in a few weeks and is considering a share sale to existing shareholders.
The construction cost estimates for the project, which have jumped to US$2.7 billion, are being funded via a $US1.2 billion loan facility which is currently drawn down to $US676 million.
"Gindalbie's major shareholder, Chinese steelmaker Ansteel, has indicated its commitment to support any equity raising, continuing its long-standing support of the Karara project development," Gindalbie said.
The Karara iron ore project, which aims to produce 8 million mt of iron ore per year, is one of the mines intended to be the final users of the Oakajee port and rail project in Western Australia's Mid West region, which is intended to export up to 100 million mt a year of iron ore from the area.