China Development Bank has arranged two syndicated facilities to be provided by it, Industrial and Commercial Bank of China, Bank of China and Export Import Bank of China.
 
The loans comprise a seven-year facility of up to $970 million with an all-inclusive interest rate not exceeding the London interbank offered rate plus 3.5% per annum; and an 18-year facility of up to $5.99 billion with an all-inclusive interest rate not exceeding LIBOR plus 3.9% per annum.
 
Repayments will start three years after financial close of the transaction, with the combined gearing ratio of both facilities expected to be around 66%.
 
MMG’s 62.5% share of the equity will be financed through a four-year $2.26 billion loan from MMG’s 74% shareholder China Minmetals Non-Ferrous Metals Company (CMN).
 
“MMG and our joint venture partners will fund this transaction through a combination of debt and equity,” MMG chief financial officer David Lamont said.
 
“We are pleased that the debt facility currently under negotiation will be long term and on highly competitive terms.”
 
The project will be 62.5%-owned by MMG, 22.5% by Guoxin International Investment Corporation and 15% by CITIC Metal Co.
 
MMG shareholders will be asked to approve the transaction and a proposed offtake agreement with CMN on July 21 in Hong Kong.
 
Guoxin has agreed to assign its share of the offtake to the other two partners, giving MMG 73.7% of product from the mine.
 
The deal is expected to be finalised in the September quarter.
 
MMG CEO Andrew Michelmore said the company had maintained a presence at Las Bambas since the deal was announced in April.
 
“We have been closely working with the Glencore project team, Las Bambas employees, local communities and governments to ensure a smooth transition of ownership continuing the excellent work done by the Las Bambas team so far,” he said.
 
“Our immediate focus upon transaction completion will be to deliver the Las Bambas project while seeking opportunities to maximise future value.”
 
Las Bambas is one of the world’s largest undeveloped copper deposits with 10.5 million tonnes of copper in resources at 0.62% and a 6.9Mt reserve at 0.73% copper.
 
The project, which is more than 60% constructed, will produce more than 2Mt copper concentrates in its first five years.