China to co-finance Petropavlovsk’s iron ore projects in Russia’s Far East

Wednesday, 24 March 2010 14:12:30 (GMT+2)

The Russian miner Petropavlovsk PLC (Petropavlovsk), previously known as Peter Hambro Mining, on Tuesday, March 23 signed a cooperation framework agreement with two Chinese companies for the co-financing and development of its iron ore projects Kimkan and Sutara (K&S) and Garinskoye in Russia's Far East.

Accordingly, Petropavlovsk has agreed an indicative loan term-sheet with Industrial and Commercial Bank of China (ICBC) for the financing of Stage 1 of its K&S iron ore project, and has also entered into a cooperation framework agreement jointly with China National Electric Equipment Corporation (CNEEC) and ICBC for the former to act as engineering, procurement and construction contractors and the latter to act as finance providers, for the development of the K&S and Garinskoye projects.
 
The ten-year loan, which would constitute 85 percent of the total amount of the proposed cost of the contract for the construction of the mining and beneficiation plant and thermal power station, is currently estimated at about $400 million, with an upper limit of $500 million for the inclusion of other possible items.

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