CDB provides $267.2 million loan to HBIS to facilitate acquisition of 35% equity stake in Palabora Mining Company Limited (PMC)

Project narrative

On December 8, 2012, Hebei Iron and Steel Group Co Ltd (HBIS), China's largest steelmaker, a consortium of Chinese companies and South Africa's Industrial Development Corporation agreed to acquire a 74.5% equity stake from Rio Tinto and Anglo American plc. at a cost of $493 million. The Chinese consortium members and their ownership in the acquisition platform ( an LLC known as Four Alliance Hong Kong, or 四联香港, “Silian”) were: Hebei Steel (via Hebei International Holding) at 43.75%; Tewoo Group (天物香港) at 25%; (corresponding domestic entity, Tianwu Import and Export, is ultimately wholly owned by the Tianjin State-owned Assets Supervision and Administration Commission); True Nice (俊安集团) at 25%; and Platmin Africa at 6.25% ( a subsidiary of the China-Africa development fund). Hebei Steel thus indirectly controlled ~32.6% of PMC at this point (43.75% of 74.5%). HBIS subsequently secured a $267.2 million China Development Bank loan (with a 7-year maturity) to facilitate the acquisition. The acquisition was completed in August 2013. Upon the completion of the transaction, HBIS operated and managed Palabora Mining Company Limited (PMC) as its largest shareholder. While HBIS acquired 35% of the shares with the proceeds of the loan from CDB. PMC (founded August 1956) was a previously publicly traded mining company headquartered in Phalaborwa, Limpopo province, South Africa. After the acquisition, the company was taken private by HBIS. The company operates a single cluster of open-pit and underground mines producing mainly copper as well as byproducts such as precious metals from anode slimes, nickel sulfate, sulfuric acid, magnetite, and vermiculite. Palabora also has processing facilities on site for the production of purified copper from mined copper ore, and a vermiculite recovery plant. Its final copper product has two forms namely, copper cathode and copper rod. PMC's open cast mine is Africa's widest man-made hole at almost 2,000 m (6,600 ft) wide.