South African platinum developer Wesizwe Platinum has secured a US$877mn financing package from a consortium of Chinese lenders.
The consortium, consisting of the China-Africa Development Fund (CADF) and the one of China’s largest mining organisations Jinchuan Group, will provide the funding for the development of Wesizwe’s Frischgewaagd-Ledig project, which has the possibility to produce 350,000 ounces of platinum group metals (PGM) a year.
The deal will be split into an equity tranche and a debt tranche.
Michael Solomon, chief executive at Wesizwe, remarks: “I am exceptionally pleased that the project will be further de-risked through this transaction, with the provision of the total financing solution.”
CADF and Jinchuan secured a letter of commitment from the China Development Bank for a US$650mn project finance facility, on the provision that the equity component of the deal, which comes to the equivalent of US$227mn in Wesizwe shares, is concluded.
Also included in the deal is an off-take arrangement to guarantee all PGM concentrate sales are offered to the Jinchuan, with the final terms and conditions still pending.
Solomon adds: “The introduction of [Jinchuan] means that Wesizwe Platinum has secured and experienced mining, financial and technical partner and this transaction also provides Wesizwe Platinum with the financial muscles to enable it to examine future growth opportunities, which is an objective of both [Jinchuan] and CADF.”
This deal comes after the recent memorandum of understanding signing between China International Fund and West African miner Bellzone that could results in Bellzone receiving US$2.7bn in infrastructure financing.
Last Updated May 27, 2010
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