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Perth / London



How an Aussie Zinc Miner Switched Horses From China to the US

Published in the Australian Financial Review

By Hans van Leeuwen

Dec. 8, 2021 

Perth-based miner Ironbark Zinc looks set to surf a wave of geopolitical project funding aimed at curbing China’s global influence, as it looks to get a project in remote northern Greenland over the line.

The junior miner, whose Citronen zinc-lead project was formerly backed by a Chinese state-owned enterprise, on Wednesday unveiled a $US657 million ($934 million) funding deal with EXIM Bank, under the US government lender’s special “402A program” that aims to help companies compete with China.

If the EXIM deal comes off, Ironbark will look to raise the required equity capital in the first half of next year. It has contracted London-based Bacchus Capital to trawl “a range of interested parties drawn from the fields of base metals mining, refining and trading, and financial investment”.

The 402 program was set up, in a sense, as a way of competing with China’s Belt and Road Initiative,” said former foreign minister Alexander Downer, one of Ironbark Zinc’s directors, referring to Beijing’s multibillion-dollar global program to bankroll infrastructure. 

It has strategic intention, and it has been legislated by Congress and then implemented by regulation by the EXIM Bank. And we’re the first standalone project to get approval as a 402A project.” 

Ironbark Zinc has spent 18 months working with EXIM Bank, including 12 months of preparation and six months in the bank’s “phase one” due diligence, leading up to the issue of a preliminary project letter that confirms the lender’s commitment.

The company was formerly planning to get its debt funding for Citronen from Chinese state firm China Nonferrous. 

But Ironbark Zinc’s Perth-based managing director, Michael Jardine, said shifting geopolitical tectonics were making it harder to straddle China and the West as a paired source of funds. 

Pulling off deals that rely on [a combination of] Chinese debt and Western equity, effectively, are relatively difficult now - there are not a lot of examples,” he said. 

It’s not that it was necessarily the wrong strategy at the time, but potentially not the easiest one to execute now.

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