ANNOUNCEMENT 09 Mar 2012
On 8 March 2012, the Japan Bank for International Cooperation (JBIC) signed an overseas investment loan agreement with Sierra Gorda SCM in project financing.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation, press release of 9 March 2012, Project Finance for the Sierra Gorda Copper Mine Project in Chile: http://www.jbic.go.jp/en/information/press/press-2011/0309-7299
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment
The overseas investment loan agreement between JBIC and Sierra Gorda SCM has a maximum value of USD 700 million. Additionally, the governmental agency Nippon Export and Import Insurance (NEXI) provides an Investment and Loan Insurance for Natural Resources and Energy for a co-finances loan of USD 300 million provided by a number of Japanese private financial institutions. Sierra Gorda SCM is a Chilian based joint venture between KGHMI, a subsidiary of the Polish company KGHM Polska Miedz, and the Japanese companies Sumitomo Metal Mining and Sumitomo Corporation.
The loan finances the Sierra Gorda Copper Mine Project, which is jointly undertaken by the Japanese companies Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation and Canadian Quadra FNX Mining Ltd. In this project, an estimated 730,000 tonnes of copper concentrate will be extracted.
Overseas investment loans
JBIC provides direct loans named overseas investment loans to Japanese companies, overseas affiliates or joint ventures where Japanese companies hold equity interests and governments or financial institutions partying with such overseas affiliates. Loans support projects in specific sectors or with a specific purpose of interest to Japan. Further information can be found on the Bank’s website under overseas investment loans.
Project financing loans include preferential terms such as repayments being solely made from the project’s cash flow generation and secured on the basis of the project's assets alone. As such the loan agreement is tied to the project's finances and not the company in question.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets and from foreign subsidiaries.