Active Mixed AidData Chinese Aid

China Eximbank leads $361.84 million syndicated loan for Phase 1 of Dairi Prima Mineral Zinc-Lead-Silver Mine Construction Project

$361.84M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	PT Dairi Prima Mineral (DPM)
Country	Indonesia
Start Date	Apr 01, 2019
End Date	Mar 29, 2028
Duration	3,285 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`102995`

Grant Description

China Eximbank contributions to $361.84 million syndicated loan for Phase 1 of Dairi Prima Mineral Zinc-Lead-Silver Mine Construction Project In October 2018, China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC) purchased a 51% equity stake in PT Dairi Prima Mineral (DPM) from PT.

Bumi Resources Mineral Tbk. for $200 million.

Then, in April 2019, PT Dairi Prima Mineral (DPM) — a special purpose vehicle and joint venture of NFC (Hong Kong) Metal Resources Co. Ltd. (51% equity stake) and PT.

Bumi Resources Mineral Tbk. (49% equity stake) — signed a $361.84 million syndicated loan agreement with China Eximbank and other Chinese banks for Phase 1 of the Dairi Prima Mineral Zinc-Lead-Silver Mine Construction Project.

📋 Loan / Grant Terms

💰 Loan Amountare unknown

However, it is known that the total cost of the first phase of the project is $452.3 million and it is being financed according to a 80:20 debt-to-equity ratio.

The purpose of Phase 1 is to construct a zinc, lead, and silver ore processing facility at the Dairi Prima Mineral (DPM) mine, which is located in a mountainous region of the Dairi Regency in North Sumatra, Indonesia.

The processing facility is located at the Anjing Hitam deposit, which is located in the Sopokomil area around 25 kilometers WNW of the Dairi Regency's main town of Sidikalang. Sidikalang is approximately 150km SSW of the provincial capital of Medan, Indonesia's third largest city. Medan and Sidikalang are linked by a standard bitumen public road.

DPM plans to use underground mining techniques to extract zinc, lead, and silver ore, which will be concentrated at a facility close to the mine.

DPM claims the majority of the tailings from the mine will be mixed with cement and injected back underground, and the remaining toxic waste will be stored in a tailings dam two kilometers from the mine.

China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC) is the engineering, procurement, and construction (EPC) contractor responsible for the implementation of Phase 1.

China Nerin Engineering Co., Ltd., whose biggest shareholder is NFC, was contracted for the design and technical service of the project in 2018.

JCHX Mining Construction Group Co., Ltd, — another Chinese state-owned enterprise — was contracted in 2019 to develop the underground mining system. China No.15 Metallurgical Construction, a subsidiary of NFC, is responsible for the project’s site leveling work. Construction began on or around September 2018.

As of 2022, construction was ongoing.

The project has been characterized by a disregard for the wellbeing of villagers who live downstream of the toxic waste that would be produced by the mine, especially considering the earthquake-prone area in which the mine is being built. In August 2024 Indonesia's highest court revoked the mine's environmental permit, siding with community residents.

However, DPM has stated that it will appeal the ruling and continue construction of the mine.

📋 Staff Comments

The Chinese project title is Dairi铅锌矿项目 or 印度尼西亚Dairi铅锌矿项目 or 印度尼西亚达瑞铅锌矿 or 达瑞铅锌矿项目 2. Evidence of China Eximbank’s role as a lead arranger for the syndicated loan is provided on the website of the lender’s legal counsel (see https://www.dropbox.com/scl/fi/wvmugjx53ao8nb5y5te19/182273734089b8fa-a.pdf?rlkey=5hz479x2ux8u6brtwczo6wkdx&dl=0).
In its 2022 Annual Report, NFC reported that it ‘worked hard on project financing and the full amount of loans has been approved.’ 4. There is some circumstantial evidence (https://www.ptdpm.co.id/images/stories/pressrelease/bumi%20resources%20minerals%20reported%20progress%20on%20cooperation%20with%20chinas%20nfc%20to%20develop%20dairis%20zinc%20%20lead%20project.pdf) that suggests the borrower may have purchased credit insurance from Sinosure. This issue warrants further investigation.
There is some circumstantial evidence (https://www.ptdpm.co.id/images/stories/pressrelease/bumi%20resources%20minerals%20reported%20progress%20on%20cooperation%20with%20chinas%20nfc%20to%20develop%20dairis%20zinc%20%20lead%20project.pdf) that suggests the other Chinese bank participants in the syndicate are Bank of China and ICBC. This issue warrants further investigation.
The mine has been under consideration since 1998, when the Indonesian Government granted DPM permission to explore for metals over a 27,420-hectare area (which has since been reduced to around 24,600 hectares).

📚 Sources & References

Jingtian & Gongcheng 2020 Annual Report
Indonesia: IFC watchdog investigates Postal Savings Bank of China over alleged loans for controversial mine project
Lembaga Pengawas IFC Menyelidiki Postal Savings Bank of China atas Pinjaman untuk Tambang Indonesia Baca selengkapnya di artikel: Lembaga Pengawas IFC Menyelidiki Postal Savings Bank of China atas Pinjaman untuk Tambang Indonesia
Compliance Appraisal of a Complaint Regarding IFC’s Exposure to the Dairi Prima Mineral Mine in Indonesia Through an Investment in Postal Savings Bank of China
Dairi Prima Mineral Zinc Mine
Jingtian & Gongcheng 2020 年度业绩报告
Bumi Resources Minerals Reported Progress on Cooperation with China’s NFC to Develop Dairi’s Zinc Lead Project
Bumi Resources Minerals Reported Progress On Cooperation With Chinas NFC To Develop Dairis Zinc Lead Project
Indonesia: Mencegah Risiko Bencana Tambang Dairi Prima Mineral
Dairi Prima Mineral zinc mine
中国有色金属建设股份有限公司 2021 年年度报告
中国有色金属建设股份有限公司第八届董事会第62次会议决议公告
PT Dairi Prima Mineral - Revolutionizing Mineral Mining for Tomorrow
PT Dairi Prima Mineral (DPM), [公告]中色股份:关于控股子公司固定资产投资的公告, 2022 年半年度报告, 2023 年半年度财务报告
关于控股子公司固定资产投资的公告
From Indonesia to Africa
Chinese mining giant NFC spreads its wings
Dairi Lead-Zinc Project in Sumatra
Indonesia
Indonesia: Preventing the looming Dairi Prima Mineral mine disaster
How a Mining Project Could Wipe Out Rural Villages in Indonesia, ‘Stop the stupidity’: Indonesia’s top court orders end to mine in quake zone 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.