Chilean copper mine obtains US$500 million loan
Maya Kendall Shah
11 October 2024
Two Milbank offices and and Carey in Santiago have helped Chilean copper and molybdenum mine Sierra Gorda obtain a US$500 million loan.
The lenders relied on A&O Shearman in New York and Philippi Prietocarrizosa Ferrero DU & Uría (Chile).
The deal closed on 24 September.
Poland’s KGHM Polska Miedz, which holds a 55% stake in the mine, has agreed to guarantee up to US$275 million of the financing.
Sierra Gorda will use the proceeds to enhance its financial liquidity and fund its sustainable operations, which use seawater and renewable energy.
The mine operates by using seawater from the cooling systems of a power plant in the port city of Mejillones. Instead of being recycled to the sea, the water is pumped to the mine through a 144-kilometre pipeline.
Located in the Antofagasta region in Chile’s Atacama Desert, the Sierra Gorda mine has a copper-molybdenum-gold sulphide mineral reserve of more than 1 billion tonnes, and a mine life of more than 20 years. Australian miner South32 owns the remaining stake in the asset.
Headquartered in the Polish city of Lubin, KGHM owns nine open put operations in Canada, Chile, Poland and the US. The miner focuses on producing copper, gold, silver, nickel and molybdenum, among other resources.
Counsel to Sierra Gorda
Milbank
Partner Alex Borisoff and associate Natália d'Avila in New York; and associate Katherine Hannah in Washington, DC
Carey
Partners Felipe Moro and Manuel José Garcés and associates Loreto Ribera and Antonio Dourthe in Santiago
Counsel to Banco Santander, Bank of Nova Scotia, Scotiabank Chile, ING Capital, HSBC Continental Europe, Sumitomo Mitsui Banking Corporation, Intesa Sanpaolo, Mega International Commercial Bank, Industrial and Commercial Bank of China (Europe) (Spólka Akcyjna) Oddzial w Polsce, and ICBC Peru Bank
A&O Shearman
Partner Sami Amir and Todd Koretzky and associates Daniel Resnick and Marius Williams in New York
Philippi Prietocarrizosa Ferrero DU & Uría (Chile)
Partner Daniel Parodi and associates Juan Ignacio Rosales and Tomás Ca