Eximbank backs LS-Nikko's Chile copper development

By Park Hyong-ki

The Export-Import Bank of Korea (Eximbank) has decided to provide $400 million in project financing to LS-Nikko Copper to develop a copper mine in Chile, the policy bank said Monday.

The project financing includes $240 million in loans for the Korean-Japanese joint venture to use for the development of the mine in Tarapaca in northern Chile, bordering Bolivia.

The copper mine is going through its second phase of development, the Eximbank noted.

Besides LS-Nikko Copper, Canada-based Teck Resources and Japan-based Sumitomo Metal Mining are currently participating in the development, securing funds from their respective banks.

The two companies, Chile and a consortium from Germany have invested a total of $4.7 billion in the Tarapaca copper mine.

Backed by the state-run Eximbank, LS-Nikko will be able to secure 100,000 metric tons of coppers from the mine over the next ten years.

The country imports 1.7 million tons of copper on average a year, according to the Eximbank.

“Countries are competing to secure copper as they seek to further develop their infrastructures, including electricity grids,” said an Eximbank spokesman.

They use coppers usually to make pipes for grid and telecommunications systems.

The financial backing is part of the state-run Eximbank's efforts to help local companies secure six strategic resources ― copper, nickel, zinc, uranium, coal and iron ore, the policy bank said.

The bank has said it will issue bonds worth $10 billion to back local companies to finance their acquisitions of assets, resources and technologies abroad.

It usually issues bonds denominated in 26 currencies to provide not only export financing, but also acquisition financing.

For example, it issued yen-denominated bonds and extended loans in yen to SK hynix for the acquisition of Toshiba's memory business last year.

Eximbank has also invested in convertible bonds issued by local companies that seek to make cross-border deals.