Bank of China contributes $15 million to $574 million syndicated loan for Phase 3 of Sulawesi Mining Power Station Project in Morowali Industrial Park (Linked to Record ID#66216, ID#61986, ID#66200, ID#66207, #85817)

Project narrative

In 2015, PT. Indonesia Tsingshan Stainless Steel (ITSS) — a subsidiary of Tsingshan Holding Group (青山控股集团有限公司) — signed a $574 million syndicated loan agreement with China Development Bank and Bank of China Limited Jakarta Branch for Phase 3 of Sulawesi Mining Power Station Project in Morowali Industrial Park. CDB acted as the arranger, original lender, and offshore security agent, contributing $559 million (captured via Record ID#66216), while Bank of China Limited Jakarta Branch acted as Facility Agent and Onshore Security Agent, contributing $15 million (captured via Record ID#69488). The loan carried a 10-year maturity, but its interest rate is unknown. As sources of collateral, the borrower pledged a mortgage of project assets, real estate, and shares of affiliated companies. A corporate guarantee was also issued in support of the loan. The purpose of the project was to construct a stainless steel and nickel pig iron (NPI) smelter and a 700MW (2x350MW) coal-fired power plant to support the smelter. The project site is located in Indonesia Morowali Industrial Park (IMIP) within Sulawesi Province (referred to as 中国印尼综合产业园区青山园区 or 印尼经贸合作区青山园区 in Chinese). Its precise locational coordinates are -2.8295432, 122.1551372. Upon completion, the plant was expected to have a production capacity of 1 million tons of stainless steel per year. Construction began on July 28, 2015 and the project was completed and put into operation in September 2017. In 2018, the smelter produced 581,000 tons of NPI and 882,900 tons of stainless steel slab, and it achieved annual sales of $1.83 billion (with profit before tax amounting to $209 million). CDB also financed Phase 1 of the Sulawesi Mining Power Station Project in Morowali Industrial Park (as captured via Record ID#66200). China Eximbank, ICBC, and Bank of China financed Phase 2 of the Sulawesi Mining Power Station Project in Morowali Industrial Park (as captured via Record ID#66207). China Eximbank financed Phase 4 of the Sulawesi Mining Power Station Project in Morowali Industrial Park (as captured via Record ID#85817). Multiple deaths have occurred at power station including: the death of a Chinese worker after being run over in 2022, the death of Indonesian workers in 2022 after a furnace exploded, the death of two workers in 2023 after collapse of a nickel waste disposal site, and an explosion in December 2023 which killed 21 workers and injured dozens. Two Chinese nationals, who were responsible for the operation of the furnace when it exploded in December 2023, were arrested for negligence.