Narrative
Full Description
Project narrative
On January 23, 2013, ICBC entered into a syndicate of seven banks led by ANZ bank to provide $250 million in total for PanAust Limited for the company's working capital, operating expenses, capital expenditures on growth projects (including Phu Bia copper and gold financing operations) in Laos, and general corporate purposes (or 泛澳大利亚资源公司旗下老挝铜金矿项目). The exact amount of financing that ICBC provided towards this syndicated loan, though, is unclear. The revolving debt facility syndicate comprises ANZ (mandated lead arranger and book runner), Barclays, Commonwealth Bank of Australia, ICBC, Investec, Natixis and Sumitomo Mitsui. Drawdown on the facilities is subject to conditions precedent usual for facilities of this type. The loan has a maturity of 4 years and interest rate of LIBOR plus 3.5% (plus political risk insurance). In January 2013, the average 6-month LIBOR rate was 0.488%, which when added to the base of 3.5% totals an interest rate for this loan as 3.988%. This facility replaced a $100 million facility, which was signed in 2010 and scheduled to mature in September 2013. The facility is meant to, in part, contribute to the growth of PanAust's enterprises in Laos, including the Ban Houayxai Gold-Silver Operation and the Phu Kham Copper-Gold Operation. These mines are operated by Phu Bia Mining, a Lao-registered company 90% owned by PanAust and 10% owned by the Lao government. The Ban Houayxai (BHX) gold (Au) – Silver (Ag) deposit is located approximately 100km north of Vientiane at 18°55’N latitude and 102°40’E longitude. The Phu Kham copper-gold deposit is located in the Xaisomboun District in Vientiane Province in Lao PDR, approximately 100 km northeast of the capital city of Vientiane. Three years later in April 2016, ICBC, Natixis, and ANZ Bank agreed with PanAust to refinance USD 90 million of the debt facilities used to develop the Phu Bia copper and gold mine (captured in Record ID #109582). The environmental risks of the Phu Kam mine include significant challenges posed by poorly managed development activities, including habitat destruction, biodiversity loss, soil erosion, and water contamination from pollutants such as heavy metals and chemicals. Air pollution from industrial emissions and improper waste disposal further exacerbate ecological and public health threats, contributing to long-term land and water degradation. There have also been some reports of potential river pollution during the rainy season. These risks underscore the critical need for thorough environmental impact assessments (EIAs) to identify, mitigate, and monitor potential impacts, ensuring sustainable and responsible project management.
Staff comments
1. PanAust is an Australian incorporated company. In July 2015, it was purchased by Guangdong Rising H.K. (Holding) Limited, which is a wholly owned subsidiary of Guangdong Rising Assets Management Co. Ltd (GRAM). GRAM is a Chinese state-owned company regulated under the State-owned Assets Supervision and Administration Commission, the People’s Government of the Guangdong Province in China. 2. The individual contributions of the seven banks to the syndicated loan are unknown. For the time being, AidData has estimated the contribution of ICBC by assuming that the seven lenders contributed equal amounts ($35,714,286) to the loan syndicate.