UPDATE 2-Failed China deal dooms Sundance Africa iron ore project

Tue Apr 9, 2013 2:39am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Sundance seeks new partner, Chinese or non-Chinese

* Suitor Hanlong lacked China government support

* Port, rail challenge dims iron ore mine prospect

* Sundance shares dive to 4-year low (Recasts, adds fund manager, banker, analyst comments)

By Sonali Paul

MELBOURNE, April 9 (Reuters) - Australia's Sundance Resources Ltd will find it tough to fund its $4.7 billion iron ore project in Africa after the collapse of a takeover by Hanlong Group, the fourth mining deal China has pulled since commodity prices fell last year.

The failed deal adds to evidence of dim prospects for large new mines and more caution in China's push for assets overseas. It also highlights Africa as a risky region for developing projects mostly due to regulatory uncertainty and lack of infrastructure, ranging from power to transport routes.

Sundance's shares plunged 56 percent on Tuesday after it terminated the $1.4 billion takeover by China's Hanlong, with investors saying there was little hope now for the Mbalam-Nabeba project on the border of Cameroon and the Republic of Congo.

"Clearly the sale process isn't happening for all sorts of reasons. That's going to put into question the whole viability of the project and the ability to fund it," said Darko Kuzmanovic, a resources fund manager at Caledonia Investments.   Continued...