Project ID: 36127

CDB pledges to finance Galeno Copper Mine Project

Not recommended for aggregates

This project is not recommended for use in creating aggregated sums. See the documentation for more information about this criteria.

Summary

Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]

Recipient

Peru

Sector

Industry, mining, construction (Code: 320)

Flow type

Loan

Concessional

Vague

Category

Intent

Commercial (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Pipeline: Pledge (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2008

Description

On January 25, 2008, Minmetals Corporation and Jiangxi Copper signed an agreement to acquire the Galeno Copper Mine — located in the Yanacocha mining district of northern Peru in the Celendin — and invest $1.5 billion. However, due to delays, the cost of the project increased to $2.5 billion. Minmetals Corporation has a 60% ownership stake while Jiangxi Copper has the remaining 40% ownership stake in the mine. In November 2008, CDB, Minmetals Corporation, Jiangxi Copper and Peru's Banco de Credito signed a framework financing agreement for the project. However, it does not appear that a loan agreement was ever finalized. Due to an increase in prices for equipment, machinery and services, the projected cost of the project is now $3.8-3.9 billion, up from $2.5 billion.The local business in charge of the mining operation is Lumina Copper S.A.C., represented by CEO Richard William Graeme. In 2010, Lumina Copper S.A.C. signed a “Social Accord” and a series of agreements with the adjacent community of La Encañada, Cajamarca, in which the company agreed to designate 90 percent of all non-skilled jobs to local residents. However, the project has been stalled since 2013. It has faced several development delays related mainly to environmental and political issues.The proven resources of Galeno copper deposits cover 7.411 million tons of copper, 165.7 tons of gold, 4981.7 tons of silver, and 201,000 tons of molybdenum. Production was expected to start in 2012 producing 200,000 metric tons of copper metal.

Additional details

The Spanish project title is El Proyecto Minero El Galeno.

Number of official sources

5

Number of unofficial sources

13

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Details

Cofinanced

Yes

Receiving agencies [Type]

Government of Peru [Government Agency]

Implementing agencies [Type]

China Minmetals Corporation [State-owned Company]; Government of Peru [Government Agency]; Jiangxi Copper Corporation [State-owned Company]; Lumina Copper S.A.C. [Private Sector]

Loan type

No Information

Gurarantee provided

No

Insurance provided

No