A Chinese project with a couple of Canadian connections is expected to result in the largest coal mine in the world. The Royal Bank of Canada is one of five co-lead banks in a consortium of 33 banks involved in the $475- million(US) financing for the project. Dresser Canada, through its Wabco Haulpak division, will be a major supplier of equipment.
The Royal says the An Tai Bao open pit mine in Shanxi province, a joint venture of Island Creek of China Coal Ltd. and Occidental Petroleum, is the largest on-land joint venture undertaken by the Chinese. It’s also the first joint venture in which foreigners were allowed to obtain a substantial equity interest.
The bank has been working on the project for almost three years developing what it says is “one of the most creative financings in which we have played a part.” For example, the repayment terms will be dictated, in part, by a number of performance tests to be conducted after the mine comes on stream and also by fluctuations in the price of coal. In fact the financing itself has attracted considerable attention in international financial circles and was named one of the “deals of the year” by Euromoney, a European financial journal.
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