Completed Commercial AidData Chinese Aid

Agricultural Bank of China participates in RMB 5.5 billion syndicated loan for Phase 3 of High Pressure Acid Leach (HPAL) Plant Project

¥1.57M RMB

Funder	Agricultural Bank of China (ABC)
Recipient Organization	PT OBI Nickel Cobalt (ONC)
Country	Indonesia
Start Date	May 23, 2023
End Date	Mar 04, 2030
Duration	2,477 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`108286`

Grant Description

Nine state-owned Chinese banks contribute to RMB 5.5 billion syndicated loan for Phase 3 of High Pressure Acid Leach (HPAL) Plant Project in Indonesia 2023 In September 2020, Shenzhen Green Eco-Manufacture (GEM) — a Chinese company — signed an offtake agreement with Halmahera Persada Lygend for the supply of mixed nickel-cobalt hydroxide precipitate (MHP), nickel sulphate, and cobalt sulphate, along with other raw materials from the High Pressure Acid Leach (HPAL) Plant Project.

Under the eight-year agreement, GEM is be supplied with a minimum of 74,400 tons and a maximum of 178,560 tons of nickel a year. It is also receive a minimum of 9,296 tons and a maximum of 22,320 tons of cobalt by-products a year.

Then, on May 25, 2023, PT OBI Nickel Cobalt (ONC) — a special purpose vehicle and joint venture of Lygend New Power (Hong Kong) Limited (60% equity stake), Li Yuen Pte.

Ltd (30% equity stake), and PT Trimegah Bangun Persada Tbk (10% equity stake) — signed an RMB 5.5 billion ($780 million) syndicated loan agreement with Agricultural Bank of China (Ningbo Branch), Agricultural Bank of China (Ningbo High-tech Industrial Development Zone Branch), Bank of China (Ningbo Branch), China CITIC Bank (Ningbo Branch), Shanghai Pudong Development Bank (Ningbo Branch), Industrial Bank (Ningbo Branch), and China Guangfa Bank (Ningbo Branch) for Phase 3 of the High Pressure Acid Leach (HPAL) Plant Project.

The Sinosure-backed loan carries an 8-year maturity.

Phase 3 involves the construction of a high pressure acid leach (HPAL) plant — including three nickel-cobalt compound production lines, with planned production capacity of 65,000 tons of nickel-cobalt compound metal (including 7,500 tons of cobalt metal) per year — in the Kawasi village mining area within North Maluku province on the Obi Islands of Indonesia.

The project is designed to utilize hydrometallurgical high-pressure acid leaching technology for the production of mixed nickel-cobalt hydroxide precipitate (MHP), along with nickel sulphate and cobalt sulphate as the end products.

Construction was originally expected to start in the third quarter of 2022 with production commencing in the first quarter of 2024. Construction commenced on June 27, 2022 and the project reached its reached its design capacity on September 2, 2024.

📋 Staff Comments

Lygend Resources & Technology Co Ltd was established in 2009 and entered Hong Kong Stock Exchange with IPO on December 1, 2022. Headquartered in Ningbo, the corporation runs nickel industry chain business. Setting out with nickel ore trading, Lygend then started to develop pyrometallurgical and hydrometallurgical facilities. Lygend products are mainly used by downstream electric vehicle and stainless steel industries.
The loan guarantee agreement can be accessed in its entirety via https://www.hkexnews.hk/listedco/listconews/sehk/2023/0315/10632958/2023031501211_c.pdf and https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0315/10632957/2023031501198.pdf3. The share pledge agreement can be accessed in its entirety via https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0315/10632957/2023031501199.pdf.
PT Trimegah Bangun Persada Tbk (TBP) is an Indonesian company that mines and processes nickel and its associated minerals on Obi Island in North Maluku. It is owned by the Harita Group.
The precise monetary value of each bank contribution to the RMB 5.5 billion syndicated loan is unknown. For the time being, AidData assumes equal contributions across the 7 confirmed members of the syndicate listed as original lenders on the grant agreement. As such, the contribution of the Agricultural Bank of China is estimated to be RMB 1,571,428,571.43 and all other banks' contributions are estimated to be RMB 785,714,285.
This issue warrants further investigation.
The Chinese project title is 宁波力勤集团印尼镍钴项目 or 印尼KPS项目 or 力勤集团印尼OBI 镍钴项目 or 力勤集团印尼 OBI 镍钴项目三期工.
The total amount insured by Sinosure is the RMB equivalent of $1.05 billion.
The fact that the loan is denominated in RMB is confirmed on pg. 12 of the following

📚 Sources & References

https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0429/2024042901286.pdf9. One source from Lygend Resources indicates that, just days before the signing of the loan agreement
Ningbo Branch of Export-Import Bank of China
Ningbo Branch of China Merchants Bank
Ningbo Branch of Industrial and Commercial Bank of China, and Ningbo Branch of Bank of Shanghai all participated in a meeting regarding the syndicated loan for the HPAL project along with the other banks on the syndicate and Sinosure. However, in the Chinese version of the grant agreement, these banks are not listed as original lenders. As the more official source, the list of original lenders on the full grant agreement has been deferred to. However, this discrepancy warrants further investigation. Sources: 2023 Annual Report
Equity Research Initiating Report: Trimegah Bangun Persada (NCKL IJ)
Financial Statements: PT Trimegah Bangun Persada Tbk. dan Entitas Anaknya/and its Subsidiaries
GUARANTEE AGREEMENT
Obi HPAL Nickel-Cobalt Project
PLEDGE OF SHARES AGREEMENT
POSSIBLE CONNECTED TRANSACTIONS PROVISION OF FINANCIAL ASSISTANCE TO CONNECTED SUBSIDIARIES AND RECEIVING FINANCIAL ASSISTANCE FROM CONNECTED PERSONS
PT Halmahera Persada Lygend Nickel Smelter power station
SPD Bank Corporate Social Responsibility Report
SPD BANK Corporate Social Responsibility Report (Environmental
Social and Governance Report)
VOLUNTARY ANNOUNCEMENT SYNDICATED LOAN FOR PHASE III (ONC) OF THE HPAL PROJECT OF THE OBI PROJECTS
中国信保承保力勤资源投资印尼Obi红土镍矿HPAL三期项目
中国银行业协会银团贷款保证合同示范文本
全球首笔！美元、跨境人民币、离岸人民币、多币种可持续性挂钩银团
农业银行“境内+境外”双代理行模式银团贷款成功落地
印尼KPS项目银团会议在宁波圆满召开 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.