Announcement of IFC Investment in Minera del Norte, S.A., Mexico on February 26, 1970

.,. HOLD' FOR RELEASE INTERNATIONAL FINANCE CORPORATION . 1 8 1 8 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IE'C News Release No. 70/7 SUBJECT: IFC Investment in Et i{era del For Use in Horning Newspapers of Norte, S.A., clexico Thursday, February 26~ 1970. The International Finance Corporation, of the World Bank Group, today announced it is helping finance a new mining project intended to assure an adequate iron ore supply for expanded operations of ~lexico's largest privately owned steel company:. Compania Fundidora de Fierro y Acero de Honterrey, S.A. (Fundidora). The IFC commitment is a $1. 5 million loan to Hinera del Norte, S .A., which will develop iron ore deposits at Hercules, State of Coahuila, in northern llexicoo Fundidora is guaranteeing the IFC loan to Hinera. Hinera is owned by • Fundidora and four of its subsidiaries • The project wi..11 .cost approximat,..~ly $Li.6 milliono In addition to IFC's loan, about $2.4 million equivalent of the project cost will be provided by le2.se purchase arrangements with Arrendadora Banamex, S .A. de C. V., a major Hexican leasing company controlled by lianco Nacion~.! de Hexico ~ S .A., and the balance of about $700,000 by Uinera's cash Eeneration. The major source of Fundidora;s iron ore since the company's establishment in 1903 has been the Cerro de I:lercado mine, operated by another Fundidora subsidiary~ in the State of Durangoo Because of Fundidora's increased production, development of a ne·w source of :iron ore became necessary. With the Hiaera commitment, IFC will have made 15 investments totaling approximately $30.G million in Hexican enterprises. Total cost of the projects was approximately $200 million equivalent • • The projects were in the fields of aircraft engine overhaul, chemicals, (more) ,. • IFC News Release No o 70/7--:·'iexico - 2 .... construction equipment, industrial equipment, industrial tools, mining, seamless steel pipe, and steel. The commitment in Hinera is IFC's sixth to assist Fundidora 9 s long-term growth. IFC participated in the underwriting of four Fundidora share issues in 1962, 1964~ 1966, and 1968 and in the underwriting and private placement of converti~le debentures in 1966. The underwritings helped raise approximately $44 million equivalent as part of the financing for Fundidora's continuing expansion and modernization program through which the company increased annual ingot capacity from 300,000 metric toos in 1962 to about 850~000 metric tons at present • • 11 •