- Region: Latin America and the Caribbean
- Energy and Natural Resources
- Overseas Investment Loans
December 13, 2012
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed on 12 December 2012, a loan agreement amounting up to 420 million U.S. dollars (JBIC portion) with Minera Escondida Limitada (MEL), a company incorporated in Chile, for financing the expansion project of Escondida Copper Mine. The loan is cofinanced with Mizuho Corporate Bank, Ltd. (Administrative Agent), Sumitomo Mitsui Banking Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd. The overall cofinancing amount is 600 million U.S. dollars.
- This loan is intended to finance the expansion project of the Escondida Copper Mine in Región de Antofagasta, Chile, the world's largest copper mine. This is undertaken by MEL, a company invested in by Mitsubishi Corporation, JX Nippon Mining & Metals Corporation, Mitsubishi Materials Corporation, BHP Billiton Group and Rio Tinto Group. The loan is expected to increase the production capacity of copper concentrate from the latter half of 2015.
- Copper is used extensively for various products, including electric cables, electrical and electronic equipment, transport vehicles and construction materials. Thus, it is an indispensable metal for Japanese industry. Demand is expected to rise on global level with growing demand in infrastructure among emerging economies, especially in China and India, and with increasing sales of hybrid and electric vehicles.*1 Since Japan relies solely on imports for copper concentrate from Chile and other countries, it is an urgent challenge to secure a long-term, stable supply of copper resources through the acquisition of equity interests in copper mining firms by Japanese companies.
- MEL is currently supplying a significant proportion of copper concentrate production to Japanese smelters. The terms of the loan include continuity of supply over the long term for a grade of product that is strategically important in the Japanese market because of its low level impurities and high copper content.
- JBIC will continue to actively support further development and acquisition of mineral resources by Japanese companies.
- *1 Hybrid and electric vehicles are said to require two to three times more copper than conventional vehicles.