Announcement of IFC Invests Twelve Million Ninety Thousand US Dollars in SIMSA Peru Zinc Project Expansion on February 14,1980

International Finance Corporation • 1818 H Street. N.W. Washington.DC. 20433. U.S.A 202-477-1234 IFC Press Release No. 80/18 Thursday, February 14,1980 SIMSA in $12.9 Million Expansion IFC Invests in Peru Zinc Project Compania Minera San Ignacio de Morococha, S.A. (SIMSA), a leaciing private mining company in Peru, is undertaking an approximately $12.9 million expansion of its zinc production capacity with the financial assistance of the International Finance Corporation (IFC). SIMSA will i~crease output at its mine at San Vicente, in eastern Peru and expand ote treatment capacity from 1,500 metric tons per day at present to 2,000 metric tons per day. IFC, the World Bank affiliate that assists economic development by support- ing the private enterprise sector, is investing $500,000 in SIMSA's equity and • providing a $2.7 million loan. Loans of $5.55 million by metal traders and local banks and approximately $4.1 million in cash generation complete the finan- cial plan. The project is in line with the Government's efforts to encourage the private mining sector, especially medium-size companies; will help develop Peru's extensive mineral resources; and will generate more than $3 million a year in foreign exchange earnings. It includes installation of a 6.3 megawatt hydro- electric unit on the Monobamba river to replace eight diesel generators. This will result in estimated savings of $700,000 annually in fuel and serve as a model for future mining projects in the region. The project, located in a jungle region, will contribute to the development of one of Peru's less developed areas. Additional project benefits include the construction of a new housing development for 180 families and increased employ- ment. The Company's concentrates have gained international acceptance, due to their constant composition and low level of impurities, ·and are marketed • worldwide •  - 2 - SIMSA is owned 100 percent by Peruvian nationals, including Company • employees. The IFC equity investment is an initial step to expand the present ownership. • [Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 676-0394]. •