Giant $70 billion coal deal could make Clive Palmer Australia’s richest person

Queensland mining baron Clive Palmer has taken another step towards claiming the mantle as Australia’s richest person with the signing of a $70 billion coal supply deal with a Chinese energy company.

The deal, inked over the weekend, will see Palmer’s China First coal mine in central Queensland supply China’s giant China Power Investment Corporation with coal for the next 20 years.

While pricing a lengthy deal like this is difficult, Palmer’s company Resourcehouse has valued the agreement at $US60 billion ($69 billion) based on a price of $100 a tonne.

The deal also takes Palmer a step closer to his goal of listing Resourcehouse on the Hong Kong Stock Exchange in a deal said to be worth as much as $6 billion. Last week, Palmer sold a 5% stake in the company to a Chinese investor for about $250 million, which would value the entire entity at a minimum of $5 billion.

Even at the lower value, the deal would make Palmer Australia’s richest person, just eclipsing fellow miner Andrew Forrest, whose stake in Fortescue Metals Group is worth about $4.3 billion.

The China First project is to be one of Australia’s largest mining and infrastructure projects in the next few years, with a capital cost of more than $8 billion, including the construction of a 395 kilometre private rail line.

Palmer expects the project to create 6,000 construction jobs, 1,500 operations jobs and up to 60,000 downstream or indirect jobs. It is expected the project will generate $700 million in annual royalties for the Queensland state government.

The project also highlights Palmer’s close ties to China. The $US8 billion engineering, procurement and construction management contract has been awarded to Metallurgical Corporation of China, while Palmer has secured $US5.6 billion in debt finance from Expert-Import Bank of China.

The mine is expected to start production in 2014.