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Overview

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

Commitments (Constant USD, 2023)$830,389,993
Commitment Year•2019Country of Activity•KazakhstanDirect Recipient Country of Incorporation•KazakhstanSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Apr 26, 2019
Last repayment
Apr 22, 2034

Geospatial footprint

Map overview

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The purpose of this project was to provide an 800 million dollar loan for the Aktogay Copper Mine Expansion Project. The Aktogay mine is located in south eastern Kazakhstan in East Kazakhstan Province, approximately 250 km from the Kazakhstan-China border. More detailed locational information can be found at https://www.openstreetmap.org/way/773805068, https://www.openstreetmap.org/way/773805070, https://www.openstreetmap.org/way/773805067, https://www.openstreetmap.org/way/1097459247.

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • KAZ Minerals Aktogay LLP

State-owned Banks

  • Development Bank of Kazakhstan JSC (Baiterek or DBK)

Collateral providers

Joint Venture/Special Purpose Vehicles

  • KAZ Minerals Aktogay LLP

Loan desecription

CDB provides $800 million loan for Aktogay Copper Mine Expansion Project

Grant element•23.5629%Interest rate (t₀)•4.81575%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•15 years

Collateral

The loan was supported by a formal security interest in a collection account with a minimum cash balance of $100,000,000. Under an account charge agreement, KAZ Minerals Sales Limited (the chargor) and KAZ Minerals PLC agreed to ensure that '(a) all sums paid by customers under sales contracts for the products produced by the Bozshakol Project and the Bozymchak Project and the copper concentrate produced by the Aktogay Project and the Aktogay Expansion Project be credited to the Charged Account.' The borrower also agreed to maintain a $100,000,000 minimum cash balance in the charged account (collection account). CDB was granted a formal security interest in the collection account at Citibank in the United Kingdom.

Narrative

Full Description

Project narrative

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 6-month 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. The Aktogay copper mine expansion project was officially opened by the President of the Republic of Kazakhstan on October 1, 2021. 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).

Staff comments

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 Record ID#88341 and the 3 additional CDB loans captured in Record 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 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 account charge (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