Grange Resources is contemplating selling some of its stake in the Southdown Iron Ore Project to help fund debt and equity requirements. The Perth based company owns 70% of the project in Western Australia which is a proposed $2.57 billion export venture.
The Chief Executive Officer of Grange Resources, Russel Clark added that if needed the company would also be willing to sell part of Savage River, which is its operational iron ore mine in Tasmania. He said that by selling close to 30% of the stake in Southdown the debt and equity requirements will also come down proportionately.
Japan’s Sojitz which owns the remaining 30% of the Southdown project is also in talks to sell part of its stake to help with the development costs of the massive project. Although no formal asset sale process is likely to take place soon given the rocky credit markets in Europe.
Mr Clark said that they recognized that it was a big project and they were not a big company. Grange’s market value is $600 million and the estimated cost of developing Southdown is $2.57 billion. He also said that he believed that the bulk of the funding for the project was likely to come from China and Japan.