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