CDB provides $83 million loan for Kingsmill Tunnel water treatment plant at Toromocho Project (Linked to Record ID#56098, #36064, #63411)

Project narrative

On September 7, 2012, Minera Chinalco Perú S.A. ('Chinalco Peru') — a special purpose vehicle and wholly owned subsidiary of Aluminum Corporation of China Limited (Chinalco) — entered into an $83 million loan (facility) agreement with China Development Bank. The loan carried an interest rate of LIBOR plus a 3.5% margin. The purpose of the loan was the construction, maintenance, and operation of the Kingsmill Tunnel water treatment plant at the Toromocho Project. The Toromocho Project is located in central Peru in the core of the Morococha mining district. It is one of the largest copper mines in the world, and the first greenfield copper mine developed by a Chinese corporation abroad. Upon completion, the project was expected to boost overall copper exports from Peru by 25%. CCCC Del Peru SAC (subsidiary of China Communications Construction Company, Ltd.) was the contractor responsible for project implementation. The Environmental Impact Assessment of the Toromocho Copper Mine Project was approved by the Peruvian government in December 2010. Chinalco Peru obtained the construction permit and began work in July 2011. The mines were officially commissioned on December 10, 2013. However, three months after its inauguration, the operation of the mine was suspended by Peru’s Environment Assessment and Enforcement Agency (OEFA) after it discovered illegal discharge of acid effluents in two nearby lakes. Chinalco quickly resolved this matter by building improved drainage and explained the incident as a result of unusual heavy rainfall which caused unexpected acid runoffs. The Toromocho Copper Mine Project began commercial production on June 17, 2015. The Kingsmill Tunnel water treatment plant treats wastewater before it is discharged into the Yauli River. The plant has significantly improved the region's underground water which had been contaminated by decades of irresponsible mining by a range of companies from Peru and North America (such as the Cerro de Pasco Corporation and Doe Run from the United States, and subsidiaries of Pan American Silver from Canada).