China Eximbank provides RMB 3.9 billion credit facility for Electrolytic Manganese Production Plant Project

On May 8, 2015, China Eximbank and Vnesheconombank (VEB) — a Russian government-owned development bank — signed an RMB 3.9 billion credit facility (line of credit) agreement for the Electrolytic Manganese Production Plant Project. Any borrowings undertaken through the facility were expected to carry a maturity of 15 years. VEB intended to on-lend the proceeds from the facility to a project company called CJSC Chek-Su.VK, which would most likely use the on-lent proceeds to finance an EPC (commercial) contract with Sinosteel. The purpose of the Electrolytic Manganese Production Plant Project is to build a plant for the production of electrolytic manganese in the settlement of Tuim in Khakassia. Electrolytic manganese has a purity of 99.8% and is used for production of special kinds of steel and alloys. The plant would have the capacity to produce 80,000 tons per year of manganese metal, and the output would be sold mainly on the domestic market. As of 2015, Russia’s demand for manganese metal was about 60,000 tons per year. CJSC Chek-Su.VK did not expect serious objections based on environmental concerns in Tuim because the company planned to use modern Chinese technology that has minimal environmental impact; also Tuim had an old nonferrous metals plant that used to produce rolled copper but that had recently been closed, leaving the plant’s workers unemployed. The total cost of the project was estimated to be 40 billion rubles (about $630 million). The financing of the project was to be provided by the Export-Import Bank of China in collaboration with VEB. CJSC Chek-Su.VK stated the plant would be constructed by Sinosteel and commissioned within 45 months of the financing being received. The plant in Tuim was expected to have 1,200 employees, and another 800 people would be employed in service areas related to the plant. The plant’s annual tax payments were expected amount to 1.5 billion rubles (about $24 million). It is unclear if this project ever entered implementation. It is also unclear if China Eximbank ever made any disbursements through the credit facility.

Additional details

1. This project is also known as the ‘Production of electrolytic metallic manganese for manufacturing special steels on the basis of ores of the Usinsk deposit in the Kemerovo region’ project.

Number of official sources

4

Number of total sources

11