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

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.

Additional details

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 Project 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.

Number of official sources

6

Number of total sources

10