- Region: Latin America and the Caribbean
- Energy and Natural Resources
- Overseas Investment Loans
March 7, 2012
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe) *1 signed today a loan agreement totaling up to about 619 million U.S. dollars (JBIC portion) with ITOCHU Coal Americas Inc. (ICA), a U.S. subsidiary of ITOCHU Corporation. The loan, cofinanced with private financial institutions, is extended to promote a project for securing and developing energy and natural resources. The total cofinancing amounts to about 885 million U.S. dollars.
- The loan is extended to ICA for its acquisition of 20% of equity shares in Drummond International LLC, which holds coal mines and transport infrastructure assets currently under operation in Colombia, from U.S.-based Drummond Company Inc. It finances a project where thermal coal will be mined from 5 open pits located near La Loma, Cesar Department in Colombia. Under this project, the production capacity is expected to increase from 30 million tons per year in 2012 to 35 million tons per year in 2015. The thermal coal produced will be supplied to Japanese electric power companies, cement manufacturers and blast furnace steelmakers over the long term. In this loan, JBIC assumes the political risk of the Republic of Colombia by performing the role of reducing local risks involved in overseas business expansion of Japanese firms.
- While Colombia is the world's 4th largest exporter of coal, its export to Japan has remained minuscule. As the ITOCHU group acquires interest in these mines, it is expected to realize a long-term, stable supply of low ash and high quality coal to Japan, leading to diversification of Japan's coal supply sources. In this context, financial support for this project will contribute to securing stable access to energy resources for Japan.
- JBIC will continue to support further development and acquisition of energy resources by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.