- Region: Latin America and the Caribbean
- Energy and Natural Resources
- Overseas Investment Loans
November 5, 2013
The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed today, a loan agreement amounting up to 210 million U.S. dollars (JBIC portion) with Minera San Cristobal S.A. (MSC), a wholly owned subsidiary of Sumitomo Corporation (Sumitomo) in Plurinational State of Bolivia (Bolivia). The loan is cofinanced with Sumitomo Mitsui Banking Corporation, which brings the overall cofinancing amount to 300 million U.S. dollars. JBIC bears a political risk and plays a role to reduce a local risk with strategic overseas business deployment of the Japanese company.
This loan provides necessary funding for MSC's additional expansion of San Cristobal Zinc, Lead and Silver Mine, located in Potosi, Bolivia, which is one of the largest mines in Bolivia with the world's sixth-largest production of zinc and lead, and the fifth-largest production of silver. It is a rare world class large-scale mine while small-scale zinc, lead and silver mines are usual cases. It is expected to produce daily 1,300 tons of zinc and 300 tons of lead concentrates, of which the quantity equivalent to 13-14% of Japan's total import will be shipped to Japan.
Zinc is used for corrosion-resistant galvanization of motor vehicles, housing materials and household electric appliances, as well as for corrosion-resistant parts of ships, bridges and docks. Lead is mainly used for automotive batteries. Japan is dependent on imports for all the zinc and lead concentrates (about 880,000 tons and 150,000 tons respectively in 2011) used as raw materials for zinc and lead metals. Given the global increase in demand for their concentrates, it is increasingly important to secure supplies. This loan will continue to secure a long-term stable supply of strategically important resources for Japan.
Bolivia has abundant resources of valuable minerals, including the world's largest deposit of lithium, in addition to zinc and lead, and is thus an important country with which Japan hopes to strengthen relations. As this loan was structured through direct dialogue between JBIC and the Bolivian government, it will help increase the presence of Japan and Japanese companies in Bolivia and strengthen ties between the two countries.
As a public financial institution, JBIC will continue to support the development and acquisition of strategically important resources for Japan, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.