Loan for Quebrada Blanca Phase 2 Project in Chile
Supporting Japan's Long-term and Stable Procurement of Copper Concentrate
- Region: Latin America and the Caribbean
- Energy and Natural Resources
- Overseas Investment Loans
The Japan Bank of International Cooperation (JBIC, Governor: Tadashi Maeda) signed on June 11 loan agreements with Sumitomo Metal Mining Co., Ltd. (Sumitomo Metal Mining) and Sumitomo Corporation, totaling up to USD560 million and USD180 million respectively (JBIC portions), to finance expansion of the Quebrada Blanca copper mine. The loans are co-financed with private financial institutions.
The purpose of the loans is to provide necessary long-term finance for the development of the Quebrada Blanca Phase 2 project located in Tarapaca (Region I), Chile. The project is being undertaken by Compañía Minera Teck Quebrada Blanca S.A. (CMTQB), a Chilean company invested in by Teck Resources Limited (Canada), Sumitomo Metal Mining, Sumitomo Corporation, and Empresa Nacional de Minería (ENAMI of Chile). Separately JBIC had signed a loan agreement for project finance on May 30, 2019 with CMTQB for the same project*1
Copper is used extensively for various products, including electric cables, electrical and electronic equipment, vehicles and construction materials. Thus, it is an essential metal for Japanese industries. Its demand is expected to continue rising globally along with increasing demand in infrastructure in emerging countries, especially in China and India, and with increasing sales of hybrid and electric vehicles*2
Since Japan relies solely on imports for copper concentrates, it is an urgent challenge to secure a long-term, stable supply of copper resources. The Strategic Energy Plan (released in July 2018) set the goal of achieving at least 80% self-sufficiency for base metals by 2030. This project supports the additional development of a copper mine in which Japanese companies hold interests and, as such, is essentially in line with the Japanese government's policies.
As Japan's policy-based financial institution, JBIC will continue to actively support Japanese companies' development and procurement of minerals and other natural resources and provide financing to ensure a stable mineral resources supply to Japan by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.
Hybrid and electric vehicles typically require two to three times more copper than conventional vehicles.