Sierra Gorda Cu Project Secures US$ 1 Billion Japan Money

Sumitomo Metal Mining and Sumitomo Corporation announced on Friday they signed loan agreements with financial institutions for total US$ 1 billion for Sierra Gorda copper mining project in Chile. With the financing, the project will develop the mining to secure copper resource.

The project developer, Sierra Gorda SCM, in which Quadra FNX Mining of Canada controls 55% share with 31.5% share by Sumitomo Metal Mining and 13.5% share by Sumitomo Corp., signed the project finance agreement on Thursday. Japan Bank for International Cooperation (JBIC) provides US$ 700 million yen of loan and 4 private banks provide US$ 300 million of loan. Nippon Export and Investment Insurance (NEXI) provides insurance to the 4 private banks.

Sumitomo Metal Mining and Sumitomo Corp. plan to secure additional US$ 300 million of loan from private banks with guarantee by Japan Oil, Gas and Metals National Corporation (JOGMEC). They try to secure copper resource by utilizing supports by Japanese government and related arms.

The project is to start production in 2014 for US$ 3.1 billion. The project will produce averaged annual 220,000 tonnes of copper for 20 years operation. Sumitomo Metal Mining and Sumitomo Corp. purchase 50% of the production, which represents around 9% of Japanese copper concentrate import.