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Overview

CDB provides $300 million loan for Third Phase of Sulphide Ore Processing Plant Project at Aktogay Copper Mine (Linked to Record ID#39557 and #41941)

Commitments (Constant USD, 2023)$327,216,472
Commitment Year•2016Country of Activity•KazakhstanDirect Recipient Country of Incorporation•KazakhstanSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 14, 2016
End (actual)
Dec 6, 2016
Last repayment
Jun 12, 2025

Geospatial footprint

Map overview

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The purpose of this project was to provide a $300 million loan for Third Phase of Sulphide Ore Processing Plant Project at Aktogay Copper Mine. The Aktogay mine is located in south eastern Kazakhstan in the East Kazakhstan Region approximately 250 km from the Kazakhstan-China border. More detailed locational information can be found at https://www.openstreetmap.org/way/773805068, https://www.openstreetmap.org/way/773805070, https://www.openstreetmap.org/way/773805067, https://www.openstreetmap.org/way/1097459247.

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% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • KAZ Minerals Aktogay LLP

State-owned Banks

  • Development Bank of Kazakhstan JSC (Baiterek or DBK)

Implementing agencies

Joint Venture/Special Purpose Vehicles

  • KAZ Minerals Aktogay LLP

State-owned companies

  • China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC)

Guarantors

Private Sector

  • KAZ Minerals PLC (Formerly Kazykhmys PLC)

Collateral providers

Joint Venture/Special Purpose Vehicles

  • KAZ Minerals Aktogay LLP

Loan desecription

CDB provides $300 million loan for Third Phase of Sulphide Ore Processing Plant Project at Aktogay Copper Mine

Grant element•12.6883%Interest rate (t₀)•5.79822%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•8.5 years

Collateral

The loan was supported by a formal security interest in a collection account with a minimum cash balance of $100,000,000. Under an account charge agreement, KAZ Minerals Sales Limited (the chargor) and KAZ Minerals PLC agreed to ensure that '(a) all sums paid by customers under sales contracts for the products produced by the Bozshakol Project and the Bozymchak Project and the copper concentrate produced by the Aktogay Project and the Aktogay Expansion Project be credited to the Charged Account.' The borrower also agreed to maintain a $100,000,000 minimum cash balance in the charged account (collection account). CDB was granted a formal security interest in the collection account at Citibank in the United Kingdom.

Narrative

Full Description

Project narrative

In 2016, China Development Bank (CDB) provided a $300 million loan via credit line to the Development Bank of Kazakhstan JSC (DBK) for the third phase of the construction of a sulphide ore processing plant at the Aktogay deposit in East Kazakhstan Region. DBK then used these loan proceeds to on-lend to KAZ Minerals Aktogay LLP, a project company and special purpose vehicle that is responsible for the financing, design, and construction of the Sulphide Ore Processing Plant Project at the Aktogay Mine. DBK signed a $300 million loan (facility) agreement with KAZ Minerals Aktogay LLP on December 14, 2016 that carried the following borrowing terms: a maturity of 8.5 years and an interest rate of 6-month LIBOR plus a 4.50%. The facility was repayable in semi-annual installments in May and November with a final repayment (maturity) date in 2025. Kazykhmys PLC (now called KAZ Minerals PLC) provided a guarantee for the loan. As an additional credit enhancement, the borrower pledged a $100,000,000 minimum cash balance in a charge account (collection account) as a source of collateral. By December 31, 2016, the loan had achieved a 100% disbursement rate. The borrower made $43 million in repayments in 2019 and it was scheduled to make an additional $43 million in repayment in 2020. DBK reportedly provided an additional $600 million for the Third Phase of Sulphide Ore Processing Plant Project at the Aktogay Mine, while KAZ Minerals contributed $963 million. The purpose of the project was to construct a sulphide ore processing plant at the Aktogay Mine (Kazakh: Ақтоғай мыс кен орны), a large scale, open pit mine with an average copper grade of 0.36% (oxide) and 0.33% (sulphide). Upon completion, the plant was expected to have a capacity of 25 million tons annually. In 2014, China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC) was granted the contract to construct the sulphide concentrator. The main sulphide concentrator was commissioned on December 6, 2016. Production began in February 2017.

Staff comments

1. AidData has estimated the all-in interest rate by adding 4.5% to average 6-month LIBOR in December 2016 (1.306%). 2. The bank account pledge agreement can be accessed in its entirety via https://www.dropbox.com/s/07rf5n70hulk1by/Aktogay%202019%20Account%20Charge%20Agreement.pdf?dl=0 3. This loan is linked to two previous loans for the Aktogay Mine. In 2011, CDB committed two loans (as captured via Record ID#41941 and #39557) worth $1.5 billion: a $1.34 billion and an RMB 1 billion loan to develop the Aktogay mine for copper cathode production.