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Overview

Bank of China provides a loan to China Molybdenum for the acquisition of an 80% stake in the Northparkes copper and gold mine

Commitments (Constant USD, 2023)$593,499,521
Commitment Year•2013Country of Activity•AustraliaDirect Recipient Country of Incorporation•AustraliaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 1, 2013
Start (actual)
Nov 1, 2013
End (actual)
Nov 1, 2013

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

State-owned companies

  • CMOC Mining Pty Limited

Loan description

Bank of China provides a loan to China Molybdenum for the acquisition of an 80% stake in the Northparkes copper and gold mine

Interest type•Unknown

Narrative

Full Description

Project narrative

In July 2013, Chinese state-owned China Molybdenum Co. Ltd. (CMOC) entered into an agreement to purchase Rio Tinto's 80% interest in the Northparkes copper and gold mine from Rio Tinto for $820 million USD ($884.249 million AUD). Specifically, CMOC's wholly-owned subsidiary CMOC Mining Pty Limited agreed to acquire the 80% interest in the Northparkes Joint Venture owned by North Mining Limited (owned by Rio Tinto). In late July 2013, Australia's Foreign Investment Review Board (FIRB) issued approval for the acquisition. In September 2013, Sumitomo Group, owner of the remaining 20% of Northparkes, waived its right of first refusal for the bid. The acquisition was completed in November 2013. This was the largest mineral acquisition done by a Chinese-funded enterprise in 2013. In 2013, the Henan Branch of the Bank of China issued a loan in support of this acquisition. The Northparkes Mine (NPM) is a copper and gold mine located in New South Wales, 27 kilometers north-northwest of the town of Parkes. It began operations in 1994. The NPM includes copper mining and beneficiation. It produces copper concentrate and gold as a byproduct. In 2019, it produced 28,591 tons of copper and 19,781 ounces of gold.

Staff comments

1. As CMOC's wholly-owned subsidiary CMOC Mining Pty Limited was the specific entity acquiring the asset, AidData has assumed it was the borrower. This issue merits further investigation. 2. The precise commitment date of the loan is unknown. This issue merits further investigation. 3. The face value of the Bank of China loan is unknown. However, given that the total cost of the acquisition was $820 million and M&A (overseas investment) loans often cover at least 70% of the total cost of the acquisition, AidData assumes for the time being that the face value of the Bank of China loan was roughly equivalent to $574 million. This issue warrants further investigation.