Narrative
Full Description
Project narrative
On December 9, 2019, Jiangxi Copper (Hong Kong) Investment Company Limited (JCCHK) — a Hong Kong-incorporated wholly-owned subsidiary of Jiangxi Copper Company Limited (JCC), a Chinese state-owned copper miner and producer — signed a share sale and purchase agreement with Pangaea Investment Management Ltd. (PIM) — a Cayman Islands-incorporated company owned by JCCHK (45% equity stake), Long March Capital Management Ltd. (45% equity stake), and Dragon GP Partner Co. (10% equity stake) — to acquire the entire issued capital (100% equity stake) in PIM Cupric Holdings Limited (PCH) — a British Virgin Islands-incorporated special purpose vehicle (SPV) holding 124,198,371 shares (18.015%) of Canada-incorporated and Toronto Stock Exchange-listed First Quantum Minerals Limited (FQM) — for $1,115,924,287.58 USD (~$8,771,164,900 HKD), to completed by December 31, 2019 in two installments, one of $446,369,715.03 USD (~$3,508,465,960 HKD) due within 30 days of the completion and another of $669,554,572.55 USD ($5,262,698,940 HKD) due within 60 days of the completion. To finance the acquisition, on or around December 9, 2019, a syndicate of three banks — the Jiangxi Branch of China Construction Bank Corporation (CCB), the Jiangxi Branch of China Development Bank (CDB), and the Nanchang Branch of CITIC Bank Co., Ltd. — entered into a $700,000,000 USD ($5,502,000,000 HKD) loan agreement with JCCHK. The loan terms are unknown. On December 9, 2019, the board of JCC approved the loan and authorized operational management to execute the financing documents. Record ID#99427 captures CCB's contribution. Record ID#99428 captures CDB's contribution. Record ID#99429 captures CITIC Bank's contribution. JCC provided $213 million USD to JCCHK for the acquisition. The acquisition would allow JCC to become the largest shareholder of FQM, as PIM Cupric's sole business was holding FQM's shares. At the time of the acquisition, FQM owned the following operational assets: Ravensthorpe Nickel Operation in Australia (100% stake), Pyhäsalmi copper-pyrite-zinc mine, Finland (100% stake), Guelb Moghrein copper-gold mine, Mauritania (100% stake), Cobre Panama copper-gold-molybdenum-silver mine, Panama (90% stake), Cobre Las Cruces copper mine, Spain (100% stake), Çayeli copper-zinc mine, Turkey (100% stake), Kansanshi copper-gold mine, Zambia (80% stake), and Sentinel Copper Mine, Zambia (100% stake). FQM owned the following assets under development: Taca Taca copper-gold-molybdenum mine, Argentina (100% stake), Haquira copper mine, Peru (100% stake), and Enterprise Nickel Mine, Zambia (100% stake). It controlled a total of approximately 49.25 million tons of copper resources. It had two large-scale nickel ore resources in Australia and Zambia with a total resource of 2.38 million tons. Its actual copper production in 2018 was about 606,000 tons. The acquisition was completed sometime in December 2019. Reportedly, from late 2019 the relationship between FQM and Jiangxi Cooper became strained because JCC wished to fund a smelter expansion at the Kansanshi copper mine in Zambia while FQM paid down its debt, but FQM delayed a technical report until late 2020 on the expansion amidst uncertainty for the need and timing of the expansion. In July 2020, Jiangxi sold 1.2 million shares in FQM.
Staff comments
1. PIM Cupric Holdings Limited was a company incorporated in the British Virgin Islands with limited liability on January 25, 2019. Its registered office was situated at Ritter House, Wickhams Cay II, Road Town, Tortola VG1110. It was established by Pangaea Investment Management Ltd. for the purpose of acquiring the shares and interest in FQM, which is its sole business. 2. The individual contributions of the three lenders to this $700 million USD is unknown. For the time being, AidData has estimated the contribution of each Chinese state-owned bank by assuming that each lender contributed an equal amount ($233,333,333.333 USD) to the syndicated loan.