China cash to prop up Oz coal venture

Waratah Coal Inc, the Australian company proposing a $5.15 billion venture in Queensland, said it signed an agreement that will see China Metallurgical Group Corp organize funding for as much as 70 percent of the project.

An estimated $3.1 billion will be borrowed from Chinese banks, the Brisbane-based company said yesterday in a statement. China Metallurgical, a State-owned construction and resources exploration company, will also take a 10 percent stake in the project, called China First, for about $515 million.

The project, described by Waratah Coal as the nation's largest thermal coal mine, will generate as much as A$4 billion of sales a year and A$70 billion during its lifespan, and regulators would be "mad" to block the equity sale, according to Chairman Clive Palmer. Australia in February established a Senate inquiry into foreign ownership.