CDB provides $118 million loan for Toromocho Project (Linked to Project ID#56098, #36064, #63411, #55899)
Commitment amount
$ 134823564.37145394
Adjusted commitment amount
$ 134823564.37
Constant 2021 USD
Summary
Funding agency [Type]
China Development Bank (CDB) [State-owned Policy Bank]
Recipient
Peru
Sector
Industry, mining, construction (Code: 320)
Flow type
Loan
Level of public liability
Private debt
Infrastructure
No
Category
Project lifecycle
Geography
Description
On October 25, 2017, Minera Chinalco Perú S.A. ('Chinalco Peru') — a special purpose vehicle and wholly owned subsidiary of Aluminum Corporation of China Limited (Chinalco) — entered into a $117 million loan (facility) agreement with China Development Bank. The borrowing terms of the loan are unknown. However, it is known that the loan benefited from a security interest on accounts, a contract for the registration of the security interest in the People's Republic of China and a trust commission designating ICBC Peru Bank as an agent bank. It is also known that the borrower was expected to use the proceeds from the loan as working capital for the operation of the Toromocho copper mine. The Toromocho Project (特罗莫克矿山) is located in central Peru in the core of the Morococha mining district. It is one of the largest copper mines in the world, and the first greenfield copper mine developed by a Chinese corporation abroad. Upon completion, the project was expected to boost overall copper exports from Peru by 25%. CCCC Del Peru SAC (a subsidiary of China Communications Construction Company, Ltd.) was the contractor responsible for project implementation. The Environmental Impact Assessment of the Toromocho Copper Mine Project was approved by the Peruvian government in December 2010. Chinalco Peru obtained the construction permit and began work in July 2011. The mines were officially commissioned on December 10, 2013. However, three months after its inauguration, the operation of the mine was suspended by Peru’s Environment Assessment and Enforcement Agency (OEFA) after it discovered the illegal discharge of acid effluents in two nearby lakes. Chinalco quickly resolved this matter by building improved drainage and explained the incident as a result of unusually heavy rainfall which caused unexpected acid runoffs. The Toromocho Copper Mine Project began commercial production on June 17, 2015.
Number of official sources
5
Number of total sources
7
Details
Cofinanced
No
Direct receiving agencies [Type]
Minera Chinalco Perú S.A. [Joint Venture/Special Purpose Vehicle]
Implementing agencies [Type]
CCCC Del Peru SAC [State-owned Company]
Collateral
a security interest on accounts, a contract for the registration of the security interest in the People's Republic of China and a trust commission designating ICBC Peru Bank as agent bank.