ICBC provides $500 million loan for Second Stage of Marcona Mine Expansion Project (Linked to Record ID#101971 and ID#102972)

📋 Staff Comments

1. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
2. The Shougang Hierro Mine in Peru has been marred by controversy since its inception, which predates Chinese ownership in 1992. The mine first began operating in February 1952, when the Republic of Peru signed a concession contract with the U.S.-based Marcona Mining Company. For the next 20-years or so, Marcona was able to successfully export Peru’s iron to countries like Japan and the U.S. In the early 1970s, the mine began to struggle economically, but after leftists successfully carried out a coup and took power of the country in 1975, the mine was nationalized by the new government. The mine was renamed Hierro Peru, or Iron Peru. During this period, the mine also struggled financially. By the 1990s, according to China’s Ministry of Commerce, the mine was ‘on the verge of bankruptcy.’ In 1992, former Peruvian president Alberto Fujimori decided to privatize Hierro Peru. Chinese state-owned Shougang Group won the bid, renamed the mine to Shougang Hierro Peru, and subsequently became China’s first major investment project in Latin America. Shougang has been operating the iron mine ever since. Initially, Shougang was successful in helping turn around the struggling mine. According to research by Xin Gou, the Chinese company was able to turn a $32 million loss in 1992 into a $5 million profit in 1993. However, since nearly day one of Chinese operation, there have been disputes with locals. In the decades since taking over the mine, protests surrounding issues like salary and safety regulations have been commonplace.
3. The Chinese project title is 秘铁投资1000万吨精矿扩建项目（二期) or 首钢秘鲁铁矿扩建项目 or 马尔科纳铁矿项目 or 首钢秘铁铁矿项目 or 秘鲁Hierro铁矿的项目. The Spanish project title is El proyecto de ampliación Marcona en Nazca.”

📚 Sources & References

• Shougang Hierro $500 million financing
• Entrepreneurs Build A Better World Under Belt and Road Initiative
• Peruvian iron ore producer obtains $500 million in financing from China
• ICBC otorgará financiamiento a Shougang Hierro Perú
• La nueva Planta de Beneficio genera desarrollo para Marcona
• Muñiz Olaya behind ICBC loan to Chinese miner in Peru
• SHOUGANG HIERRO PERÚ S. A. A. República de Chile 262
• Jesús María-Lima 11 Telf. 714 5200 Apartado 1229 Lima 1 1 ANALISIS Y DISCUSION DE LA GERENCIA – 4to. TRIMESTRE 2017
• Shougang Hierro PerúS.A.A. Estados Financieros
• Marcona mine
• Shougang Hierro to invest $1.5 bln on expansion at Peru mine -manager
• SHOUGANG HIERRO PERÚ S.A.A
• An embattled Chinese mine in Peru faces its latest challenge, 2018年12月30日 秘鲁第27天：中国工商银行（秘鲁）全心全意为“走出去”的中企服务, 2018年12月30日 秘鲁第27天：中国工商银行（秘鲁）全心全意为“走出去”的中企服务
• 中拉关系发展的新动能
• 白银集团：以“首信模式”亮出走出去新名片
• Shougang Hierro Peru’s 10-Million-Ton Mineral Concentrates Expansion Project Completed
• 驻秘鲁大使贾桂德在首钢秘铁二期扩建项目竣工仪式上的致辞
• 首钢秘鲁铁矿股份有限公司
• Tensiones entre la minería y la pesca en Marcona
• Marcona in trouble again, over contamination
• Strike by Peru’s Miners Against China’s Shougang Group Hardens
• Mining expansion raises concern at Marcona Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.