1. The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed an import loan agreement^*1  totaling up to 224 million U.S. dollars (JBIC portion) with Corporaciόn Nacional del Cobre de Chile (CODELCO) in the Republic of Chile. The loan is cofinanced with The Bank of Tokyo-Mitsubishi UFJ, Ltd. The total cofinancing amount is 320 million U.S. dollars.
    
2. The aim of this loan is a stable procurement of molybdenum oxide throughout the loan term. Therefore, JFE Steel Corporation, Nippon Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Nippon Steel & Sumikin Stainless Steel Corporation, Nippon Yakin Kogyo Co., Ltd, Daido Steel Co., Ltd and Hitachi Metals, Ltd., will each sign a long-term offtake contract with CODELCO on Molybdenum oxide.
    
3. Molybdenum, mainly produced in oxidized molybdenum compounds as a byproduct in copper mines, is used as an additive^*2  to enhance the heat resistance and strength of steel (special steel), and to increase the function of chlorine resistance, etc. Thus, it is an indispensable rare metal for manufacturing upscale steel such as high quality steel. CODELCO is a national enterprise wholly owned by the Republic of Chile, which boasts the world’s No.1 copper production and the largest molybdenum production, and is the world's top class molybdenum oxide supplier. Japan has been provided with high quality molybdenum oxide by CODELCO since the early 1980s. Recently, the global demand and supply balance of molybdenum has been significantly impacted by the large scale procurement of molybdenum by emerging countries, where domestic demand is soaring.
    
4. Each steel company in Japan has been making efforts with the help of the Ministry of Economy, Trade and Industry and others aiming at securing stable procurement of molybdenum oxide from CODELCO. Given such continued efforts, JBIC has reached an agreement with CODELCO by providing loans based on the premise of long term offtake of molybdenum oxide by Japanese companies. The loan will be used as funds necessary to establish a new refinery plant where molybdenum products will be produced for CODELCO, and it has high significance in Japanese medium-and long-term access to mineral resources.
    
5. JBIC will continue to support the development and acquisition of interests in natural resources that are strategically important for Japan by negotiating with foreign governments and companies, by drawing on its various financial facilities and schemes for structuring projects, and by performing its risk-assuming functions.

Note

1. *1 The loan agreement was concluded on May, 24th, 2012. However, the press release was issued today because other necessary procedures among the companies concerned have been completed. 
2. *2 Stainless steel is an alloy of iron and chromium. It is resistant to corrosion because it forms a film mainly of chromium oxide. Adding molybdenum oxide toughens resistance to corrosion ( resistance to chlorine, etc.).