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IFC SIGNS AGREEMENT WITH FUNDICION REFIMET S.A. OF CHILE


M. Stopford
Ph: (202) 458-4698
Fax: (202) 676-0365
E-mail: MStopford@Worldbank.org


WASHINGTON, D.C., July 17 -- The International Finance Corporation (IFC) signed a US$61 million financing agreement with Fundicion Refimet S.A. (FRSA) on July 12, 1996, which will help finance the expansion of its copper smelter. The project will produce a significant positive environmental impact by curtailing sulfuric acid emission. The expansion has an estimated total cost of $97 million (including a $30 million refinancing). It will expand the smelter's blister copper capacity from about 90,000 mtpy to about 150,000 mtpy (of which at least 100,000 tpy will be further processed into anode) and will significantly increase production of sulfuric acid, a chemical byproduct.

To accomplish these production goals, FRSA will purchase an existing sulfuric acid plant to increase sulfuric acid production from 50,000 mtpy to 286,000 mtpy; add capacity to converters; purchase and install an anode casting wheel and refining furnace; and increase smelter efficiency by injecting oxygen into the furnace.


The new acid plant capacity will allow FRSA to capture (in sulfuric acid) over 85% of the sulfur in its copper feedstock, thereby dramatically reducing its SO2 emissions. The sulfuric acid will be sold mostly in northern Chile to the local mining industry and will produce revenues of some US$12-14 million a year. Completion of the project will bring the company in compliance with Chilean regulations and World Bank environmental guidelines.


"Fundicion Refimet provides a clear example of how implementing environmental improvements can make good business sense," states Mr. Azam K. Alizai, Director, Oil, Gas and Mining Department. "Furthermore, this project reflects IFC's interest in deepening Chile's private sector access to international capital beyond the well-known first tier companies."


IFC is making a US$61 million loan to FRSA, US$46 million of which has been underwritten by the Bank of Montreal. FRSA is owned by Noranda Inc. (24.8%) and Barick Gold Corp. (25.1%), two leading Canadian mineral firms, and Inversiones Minera del Pacifico SA (50.1%), a Chilean holding company.


IFC is a member of the World Bank Group and is the leading multilateral source of equity and loan financing for private sector projects in the developing world.