Announcement of IFC Helps Finance Major Copper Project in Zambia Two Hundred Fifty Million US Dollars Expansion of Production Facility on January 7, 1982

IFC Press Release No. 82/23 Thursday, January 7, 1982 IFC Helps Finance Major Copper Project in Zambia US $250 Million Expansion of Production Facility The International Finance Corporation is making a $30 million investment to help finance a $250 million major copper expansion in Zambia. The project, which will be completed in 1984, will enable Nchanga Consol- idated Copper Mines Limited (NCCM) to maintain its copper production at 370,000 tpa. The project will produce copper without any new ore extraction investment, at substantially lower production costs than those at the Company's other opera- tions. Moreover, as a major earner of foreign exchange, the project will have a strong impact on the balance of payments and debt service capacity of Zambia. NCCM plays a vital role in the Zambian economy. Its production represents about two thirds of output in the mining sector, which provides 90 percent of Zambia's foreign exchange earnings. The financial plan for the project includes IFC's loan amounting to DM 70,000,000 ($30 million equivalent); a h 15 million loan ($28 million equiva- lent) from the Commonwealth Development Corporation of the U.K.; an ECU 25 million ($26 million equivalent) from the European Investment Bank; and $30 million euro- dollar loans guaranteed by Overseas Private Investment Corporation. Other sources of financing for the project include local loans of Kwacha 40 million ($44 million equivalent) and suppliers' credits arranged through the Export Credit Guarantee Department of the U.K.,amounting to the equivalent of $71 million. A eurodollar loan arranged by Stanuard Chartered Bank Ltd. of the U.K.,For $21 million equiva- lent will complete the financial package. IFC's willingness to provide a long repayment term has encouraged other institutions to do likewise, lengthening the term of the project's debt. Moreover, the Zambia Government announced recently that NCCM and Roan Consolidated Mines Limited, Zambia's other major mining company, had agreed in principle to a merger, to become Zambia Consolidated Copper Mines, Ltd. (ZCCM). -2- ZCCM will be one of the world's largest copper producers, with annual copper output of over 600,000 tpa. The merger is designed to strengthen the copper sector by rationalizing operations, reducing costs, and making better use of scarce skilled personnel. [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) 676-0393.]