Loans for Taganito Nickel/Cobalt Project in the Philippines
Supporting Japanese Businesses in Securing of Long-Term Stable Supply of Rare Metals

• Region: Asia
• Energy and Natural Resources
• Overseas Investment Loans

1. The Japan Bank for International Cooperation (JBIC; Governer: Hiroshi Okuda) signed today loan agreements totaling up to 92 million U.S. dollars (JBIC portion) with Sumitomo Metal Mining Co., Ltd. (SMM), and up to 16 million U.S. dollars (JBIC portion) with Mitsui & Co., Ltd. (Mitsui). The loans are cofinanced with private financial institutions.  
    
2. The loans are intended for SMM and Mitsui to finance a nickel/cobalt mixed sulfide (MS)^*1 production project^*2 undertaken by Taganito HPAL Nickel Corporation (THPAL), in Taganito, Northern Mindanao, the Republic of the Philippines (the Philippines), where SMM, MBAPR Holdings Corporation (a wholly-owned subsidiary of Mitsui) and Nickel Asia Corporation, a Philippine corporation (NAC), hold equity stakes. The project will produce nickel/cobalt MS from low-grade nickel oxide ore by using a high-pressure acid leaching (HPAL) process, a technology with which SMM has successfully started and sustained commercial production ahead of competitors worldwide. SMM will purchase the whole MS output (50,000 tons annually) and import to Japan for the nickel ingot/cobalt ingot production at SMM's nickel smelter in Niihama, Ehime Prefecture.
    
3. Nickel and cobalt are both materials used in a wide range of industries. Nickel is essential for the production of stainless steels and a variety of electronic materials (such as semi-conducting alloys and batteries), while cobalt is an important ingredient in lithium ion battery cathodes and special steels used in aircraft. Japan, however, relies completely on imports for such mineral ores, and given increasing demand for nickel and cobalt as materials for stainless steels, electronic materials and special steels in the global market, there is greater need to secure their supplies. The loans will contribute to securing the long-term stable supply of nickel and cobalt by supporting the production of MS.  
    
4. JBIC will continue to support the development and acquisition of interests in natural resources that are strategically important for Japan by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.  

Note

1. *1 MS is an intermediary product produced in the nickel smelting process.
2. *2 JBIC signed a loan agreement, in July 2011, with THPAL to assume political risk in the Philippines associated with this project and to mitigate local risks entailed in the Japanese companies' overseas business development. See the press release on July 5, 2011.