Orica turns to ECA financing

Australia’s export credit agency EFIC has provided a US$50mn direct loan to mining services supplier Orica.

The 10-year loan will be used to boost Orica’s investment into the construction of an ammonium nitrate plant in Indonesia.

The plant, due to be built by Kaltim Nitrate Indonesia, will be used to produce 300,000 tonnes of industrial grade ammonium nitrate a year, which is a key ingredient in mining explosives.

Orica is investing up to US$550mn in the Bontang, East Kalimantan-based plant.

“To better match its investment in the plant, Orica sought longer-term finance than the commercial bank market could provide. As a result, Orica turned to export credit agencies,” EFIC notes in a statement.

Noel Meehan, director of finance at Orica, adds: “At a time when the commercial market has limited appetite for longer tenor financing, export credit agencies like EFIC were able to meet our particular financing needs in a way that the commercial banks alone could not. Working with EFIC has been a very positive experience, they were very responsive to our timing and commercial requirements and helped us to find a financing solution that suits us both.”