Signing of project finance agreements for a copper mining project in Chile

May. 16. 2009
Marubeni Corporation

We are pleased to announce that Minera Esperanza, located in the Republic of Chile, which is owned 30% by Marubeni Corporation (“Marubeni”) and 70% by Antofagasta plc (“Antofagasta”), one of the world leading copper producers, signed the loan agreements relating to the USD1.05bn project financing for the development of the Esperanza copper mining project (the “Project”) on 15 May 2009. The project financing is equal to approximately 50% of total Project costs.

The project financing facility is being provided by a consortium of senior lenders including  Japan Bank for International Cooperation (“JBIC”), Export Development Canada (“EDC”) and KfW IPEX-Bank (“KfW”), and a group of seven commercial banks comprising Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation, ING Capital LLC (the Netherlands), Calyon  (France), Banco Santander (Spain) and Natixis (France).  Through the arrangement of this project financing, Marubeni will transfer part of the project risks inherent in the Project to these financial institutions.

The Project is to produce copper concentrate and is being developed in the Sierra Gorda district in (about 160km north-east of the city of Antofagasta) with the target production start at the end of 2010.  The Project has proven & probable copper reserves of 583 million tonnes and expected average annual production of 714,000 tonnes of concentrates containing 191,000 tonnes of payable copper, 215,000 ounces of payable gold and 1,132,000 ounces of payable silver in the first ten years of production.  The total Project cost is estimated to be USD2.3 billion.

It is forecasted that about 40% of the concentrate produced by the Project will be supplied to Japan under long-term offtake agreements, accounting for approximately 7% of Japanese copper imports.  Marubeni intends to continue developing copper operations in the Sierra Gorda district in Chile’s II Region jointly with Antofagasta and expects to  secure additional copper resources for Japan in the future.

Marubeni’s 30% investment in Minera Esperanza was made  through its 100% owned subsidiary, Marubeni LP Holding B.V. (“MLPH”). Marubeni is currently in the process of arranging an acquisition financing for MLPH on a limited recourse basis. Marubeni is aiming to achieve a financial close of this financing in the very near future.

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