Narrative
Full Description
Project narrative
On 31 May 2005, Codelco Chile and China Minmetals Corporation announced their creation of a joint venture company in which both companies would participate equally. On 22 February 2006, negotiations concluded, and in March 2006 the companies formalized a joint venture agreement by which they established Copper Partners Investment Company Ltd. (CuPIC). Under this agreement, Codelco would receive an advance of 550 million USD as a payment from the joint venture for a long-term purchase contract by which Codelco would sell annually 55,750 tons of copper to CuPIC for a period of 15 years. In turn, CuPIC would sell the copper to Minmetals under market terms through a long-term sales contract which similarly covers a period of 15 years. These monthly shipments were in operation by June 2006. Minmetals, meanwhile, would have an option before and after the year of 2009 to acquire at market price 25 to 49 percent of the shares in Gaby copper mine newly developed by Codelco. On 23 September 2008, both companies signed an agreement that suspended indefinitely Minmetal's option to obtain a stake in Gaby copper mine. In connection with this transaction, the two sides appointed China Development Bank as the lead organizer and underwriter for a term loan facility to the joint venture company. As the arranging bank, loan provider, agent bank and guarantee agent bank for the copper project of Minmetals and Codelco, China Development Bank designed the financing structure and would provide 330 million US dollars for a term of 11 years with a fixed interest rate of 6.5%. The CDB loan is captured in Record ID #37231. The remaining 220 million USD that CuPIC would provide to Codelco as advance payment for the long-term sales contract would be financed through equity investments made equally by Minmetals and Codelco. AidData captures the 110 million USD of financing from Minmetals as a loan in Record ID#42004 for the advance payment to Codelco. According to the Sponsor Agreement dated 8 March 2006, the subsidiary Codelco International Ltd. agreed to transfer its rights held in Copper Partners Investment Company Ltd. as collateral security in favor of China Development Bank. As of December 2008, Codelco International Ltd. had ceded CH$267,143 in 2007 and CH$235,714 in 2008 of its rights to CuPIC to the China Development Bank as security collateral. In December of 2009, Codelco International Ltd. ceded another $240,565 worth of its CuPIC rights to the CDB. By March 2012, CuPIC had paid off its debt to the China Development Bank and, as of December of 2015, the contract was still operational.