CDB provides $800 million loan for Aktogay Copper Mine Expansion Project (Linked to Project ID#53580, ID#41941, ID#39557)

On April 26, 2019, the Development Bank of Kazakhstan (DBK) signed an $800 million term facility agreement with China Development Bank for the Aktogay Copper Mine Expansion Project. DBK then on-lent the proceeds of the loan to a special purpose vehicle called KAZ Minerals Aktogay LLP (which is a wholly-owned subsidiary of KAZ Minerals PLC). The facility (loan) agreement between DBK and KAZ Minerals Aktogay LLP was signed on June 14, 2019. The loan matures on November 26, 2034, and bears interest at a rate of LIBOR plus a 2.2% margin. In November 2019 and December 2019, DBK drew down two tranches of $140 million and $60 million, respectively, and in April 2020 and October 2020, DBK drew down further tranches of $80 million and $100 million, respectively, under the facility (loan) agreement. As of December 31, 2020, the aggregate principal amount outstanding under the CDB facility agreement was $380 million. The purpose of this project is to expand the Aktogay mining and processing plant (MPP). In February 2021, KAZ Minerals PLC announced that construction works at the Aktogay copper mine expansion project in Kazakhstan were affected by reduced staff availability in the first half of 2020, however, works progressed according to plan in the second half of the year as COVID-19 related restrictions were eased and the group’s testing and isolation measures enabled shift changes to take place safely. On June 4, 2021, a sub-loan agreement was signed between Kazakhstan Development Bank and China Development Bank in the amount of $217 million in order to finance the investment project “Construction and operation of a complex for processing gold-bearing primary ores with a capacity of 5 million tons per year” by RG Processing LLP, RG Gold LLP. As of January 1, 2022, $56.5 million has been disbursed through this loan. Aktogay is a large-scale, open pit mine with a remaining mine life of around 25 years (including the expansion project) at an average copper grade of 0.27% (oxide) and 0.33% (sulphide). It was forecast to produce about 100,000 tons of copper from sulphide ore in 2021, increasing to over 170,000 tons per year from 2022 to 2027 after the second concentrator commences operations. The expansion project is expected to double sulphide ore capacity from 25 metric tons to 50 metric tons per year and add 80,000 tons of annual copper production from 2022-27 (and about 60,000 tons per year from 2028 onwards).

Additional details

1. This project is also known as the Aktogay MPP Project and the Kaz Minerals Aktogay LLP Project. The Chinese project title is 哈萨克斯坦阿克托盖铜矿项目. 2. According to CDB, as of 2020, it had disbursed $1.34 billion and RMB 1 billion for the Aktogay Copper Mine Project. These disbursements were likely made through the $800 million CDB loan captured in Project ID#88341 and the 3 additional CDB loans captured in Project ID#53580, ID#41941, ID#39557. 3. AidData has calculated the all-in interest rate by adding 2.2% to the average 6-month LIBOR rate in April 2019 (2.633%). 4. Loan disbursement information can be found in the 2020 DBK Annual Report. 5. KAZ Minerals Aktogay LLP is a special purpose vehicle and wholly-owned subsidiary of KAZ Minerals PLC. 6. 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

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