CNMC provides $730 million loan for Deziwa Copper and Cobalt Mine and Processing Plant Construction Project

Project narrative

In 2015, China Nonferrous Metal Mining Co., Ltd. (CNMC) announced its intention to develop the Deziwa copper and cobalt mining site in the wake of China's adoption of the ‘Made in China 2025’ policy. Then, on June 13, 2016, CNMC and La Générale des Carrières et des Mines (Gécamines) signed a joint venture agreement for the Deziwa Copper and Cobalt Mine and Processing Plant Construction Project. The joint venture agreement was amended on April 26, 2017 to specify the conditions for implementing the first phase of the Deziwa Copper and Cobalt Mine and Processing Plant Construction Project. CNMC subsequently issued a $730 million loan to Société Miniere De Deziwa (Somidez) — a special purpose vehicle and joint venture between the China Nonferrous Metal Mining Group (51%) and Gécamines (49%) — for the Deziwa Copper and Cobalt Mine and Processing Plant Construction Project. The loan carried an interest rate of LIBOR plus a 8% margin but it was capped at an all-in rate of 9%. Total interest over the lifetime of the loan was capped at $66.8 million. The April 26, 2017 agreement gave CNMC, which signed an offtake agreement with Somidez, an exclusive right to purchase all minerals produced at Deziwa mine and processing plant until the loan was fully repaid and the project is handed over to Gécamines. The proceeds of the loan were to be used by the borrower in part to finance its $636,595,730 commercial (EPC) contract with CNMC Trade Company Limited (CTCL). The purpose of the $880 million project was to construct large open-pit copper and cobalt mine and processing plant located about 35 km east of Kolwezi in Lualaba Province in the Democratic Republic of the Congo. The mine is estimated to hold 4.6 million tons of copper and 420,000 tons of cobalt. The project site sits directly adjacent to the Mutanda Mine. CTCL was the EPC contractor responsible for project implementation. Construction started in May 2018. The mine and processing plant were put into production in November 18, 2019. The mine and processing plant were officially inaugurated in January 15, 2020.