Billionaire to form China-focused resource giant

An Australian billionaire plans to launch his private company, Resource Development International, as a resources giant that would supply iron ore, nickel and energy to China.

Iron ore magnate, Clive Palmer, who was conservatively valued at A$1.5 billion by Australian business magazine, BRW, has been busy lining up companies for RDI to swallow.

Success depends on a proposed A$5-billion initial public offering on the Hong Kong Stock Exchange and possibly a listing on the Australian Stock Exchange.

Palmer has made a proposal, but not a formal offer, to merge RDI with junior iron ore explorer Australasian Resources (ARH-A), in which Palmer holds a 66.4% interest, for an estimated A$327 million or A$2.20 per share.

China’s fourth largest steel maker Shougang Corporation has a 6.3% interest in developing Australasian’s A$2.7 billion Balmoral South project in the Pilbara region of Western Australia. RDI would have the rights to 20 billion tonnes of iron ore.

Palmer is also the chairman of Gladstone Pacific Nickel (GPN-T, GPN-T). Gladstone has entered a scheme implementation agreement with RDI under which RDI will acquire all Gladstone shares for 2.20 per share.

Palmer has a 13.95% stake in Gladstone, which is currently working on a feasibilty study that’s evaluating a long-life nickel cobalt refinery at the deep water port of Gladstone in Queensland.

The refinery would treat high grade nickel laterite ore from New Caledonia and other southwest Pacific islands, as well as ore from the company’s own Marlborough deposits. The refinery would produce 126,000 tonnes of nickel per year (8-10% of global nickel demand) and 10,400 tonnes of cobalt per year.

The deals are a ways off from closing; RDI has until the end of March 2009 to complete its IPO according to the agreement.

Gladstone plans to hold an “extraordinary general meeting” on Aug. 14 to obtain shareholder approval for certain transactions with Palmer.

Palmer made his first millions in real estate, retiring at age 29. After a few years of living the good life in the mid-1980s, he started three companies focusing on oil trading, research and development and mining.