(Corrects headline of story published June 19 to show that the company may miss a self-imposed target, not a deadline.)
June 19 (Bloomberg) -- Alderon Iron Ore Corp., developer of the C$1.3 billion ($1.2 billion) Kami iron mine in Canada, may miss a self-imposed target for completing the project’s financing package, Chairman Mark Morabito said.
“That’s possible, though it won’t be much longer before we have it,” Morabito said by telephone from Beijing. “The project itself is shovel ready -- we are fully permitted. All we have to do is bring in the money.”
Falling prices for iron ore, a raw material in steelmaking, and the ripple effect from a crackdown in China on steel-industry borrowing have hampered Vancouver-based Alderon’s efforts to reach a final financing agreement with lenders, Morabito said.
That may prevent Alderon from conducting a shareholder vote on the project financing at its annual meeting in Montreal on July 29, he said. The company would prefer to avoid having to set a separate special meeting to get shareholder approval, he said.
It wouldn’t be the first time events have not gone according to Morabito’s expectations.
Last August, he said Alderon was within weeks of signing on a new Asian partner for Kami and that a financing package would be completed near the end of 2013. Alderon has fallen 14 percent this year as the financing and its search for a second partner have dragged on.
Alderon fell 0.7 percent to C$1.42 at the close in Toronto.
Ready to Go
Last month Alderon signed an agreement with the provincial government of Newfoundland and Labrador, clearing the way for the start of construction as soon as financing is ready, Daniel Greenspan, a Toronto-based analyst at Macquarie Group Ltd., said in a note to clients on May 26.
Alderon is continuing to seek a second partner after Hebei Iron & Steel Group, China’s largest steelmaker, signed onto the Kami project in 2012. Hebei is paying C$182.2 million for 20 percent of the Canadian company and a 25 percent stake in the mine.
Hebei is obligated under the pact to buy 60 percent of Kami’s annual output to a maximum of 4.8 million tons of the first 8 million tons of concentrate each year. Hebei also pledged to help Alderon arrange debt financing, including from Chinese banks.
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