EDB provides a US $90 million loan facility to the Industrial Metallurgical Holding
Moscow, 29 December 2016. Eurasian Development Bank (EDB) and the Industrial Metallurgical Holding (IMH) signed a loan agreement to boost iron ore outputs. The document was signed by Konstantin Limitovsky, Deputy Chairman of the Management Board at EDB, and Evgeny Zubitskiy, President of IMH.
In accordance with the agreement, EDB will provide US $90 million to IMH for eight years. The borrower in the transaction is Kombinat KMAruda and the guarantors are Koks and Tulachermet. The facility will finance a project to enhance iron ore outputs with the reserves from the lower levels of KMAruda’s Korobki deposit.
“As early as in the beginning of 2016, EDB’s analysts forecast the recovery of the market in steel and rolled ferrous metal products and, later, in metallurgical raw materials, including metallurgical coal and iron ores, due to shrinking production in China. Since the project is aimed to provide the holding with its own iron ore and cut costs for its purchase in the market, the enhancement of the Korobki deposit’s output will have a positive effect on IMH’s financial performance,” Konstantin Limitovsky, Deputy Chairman of the Management Board at EDB, commented.
The project envisions constructing a mine to increase KMAruda’s yearly output from the current 4.6 to 7 million tonnes of iron ore. Production at the lower levels of the Gubkin mine (at a depth of 250 m) is planned to begin in late 2019 or early 2020 and is expected to reach the designed output by 2022. KMAruda’s iron ore reserves total 356 million tonnes and are sufficient to meet IMH’s demand for this stock for more than fifty years.
“The agreement with EDB was entered into as part of IMH’s financial strategy aimed at decreasing the overall cost of the holding’s loans and extending the loan periods. The main facility will be disbursed over a long period in accordance with the design documentation. At the same time, the agreement provides for the possibility to use a part of the limit in the amount of not more than US $20 million to recover the company’s previous expenditure for the project. The company has already raised the first tranche under the agreement. We are happy to cooperate with EDB and plan to develop jointly other IMH’s projects,” Sergey Cherkaev, Vice President and CFO at IMH, added.
Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. EDB’s charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.
Read more at http://eabr.org/
The Industrial Metallurgical Holding is a Russian vertically integrated metallurgical company manufacturing commercial iron, producing and processing metallurgical coal and iron ore, and engaged in foundry and powder metallurgy. IMH is the world’s largest exporter of commercial iron and Russia’s top supplier of coke. The group’s key production assets are located in Kemerovo, Belgorod, Tula and Kaluga Regions of Russia.
KMAruda is part of IMH’s ore and iron division. It pioneered the development of the world’s largest iron ore basin, the Kursk Magnetic Anomaly. The company was founded in 1953 and is located in Russia’s Central Black Earth Region. It extracts banded iron formations from the Korobki deposit and produces high-quality iron ore concentrate. Tulachermet has been its permanent buyer since 2006.
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29 December, 2016