Chinese New Year off to a good start as Walkabout wins $12.3m handout
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The Chinese New Year is off to a good start for Africa-focused graphite player Walkabout Resources, which is set to receive a $US9.75 million ($12.3 million) cash injection under China’s ambitious One Belt, One Road initiative.
One Belt, One Road — the brainchild of President Xi Jinping back in 2013 — is an initiative to build efficient trade corridors between China, Asia, the Middle East and Europe.
The multi-trillion-dollar project involves new rail, road and maritime infrastructure in some 70 countries — but has attracted suspicion from Australia and the United States — who are considering a rival plan.
Walkabout (ASX:WKT) has received confirmation from the China Export Credit and Insurance Agency (Sinosure) that it will be given funding for 80 per cent of China-sourced project equipment for its flagship Lindi graphite project in Tanzania.
Graphite is used in steelmaking as well as in lithium ion batteries for electric cars.
Investors didn’t seem overly thrilled with the news, however, as shares dipped 4.2 per cent to 9.1c on Tuesday.
State-owned Sinosure was established to promote China’s foreign trade and economic co-operation. Chinese companies will only provide credit to foreign businesses if their invoices are insured by Sinosure.
“The approval of deferred loan funding for the project completes a major cornerstone of our funding plan,” chairman Trevor Benson told investors.
“The [Lindi] project is progressing extremely well in spite of the legislative delays being experienced in Tanzania.”
Walkabout has met with the newly appointed acting CEO of the Tanzanian Mining Commission and says it has been assured that progress on implementation of the new regulations is well underway.
The east-African nation stunned ASX resource plays in July last year with sweeping changes to its Mining Act, including compulsory 16 per cent government ownership of mining companies.