Oyu Tolgoi underground financing package signed in Ulaanbaatar;
Agreement will lead to US$1+ billion in US and Canadian exports;
Canada provides 21% of US$4.4 billion funding

On December 16, on the date forecast by Prime Minister Ch. Saikhanbileg, Oyu Tolgoi LLC,, Turquoise Hill Resources (THR) and Rio Tinto signed documents in UB confirming the US$4.4 billion financing package for OT’s underground mine phase, which represents 80% of the project’s total value. Construction is expected to start early in 2016.

The $4.4 billion project finance facility, one of the largest ever in the mining industry, is being provided by a syndicate of international financial institutions and export credit agencies representing the governments of Canada, the United States and Australia, along with 15 commercial banks. Jeff Tygesen, Turquoise Hill's CEO, said, "The signing of project finance is an historic vote of confidence in both the project and Mongolia. We look forward to working with the Mongolian Government and Rio Tinto to complete the remaining steps leading to the restart of underground development."

Canada was the source of over 21% of the financing. The largest single component of the package – US$ 750 million – was provided by Export Development Canada (EDC), a commitment that represents EDC’s largest-ever project finance loan. The US Export-Import Bank (EXIM) committed US$ 367 million. Participation of EDC and US EXIM will lead to more than US$1.1 Billion in export sales of North American goods and services for the OT Underground Phase. An additional US$145 million was provided by the Canadian Imperial Bank of Commerce (CIBC), the only North American commercial bank to participate.

Other international lenders include the International Finance Corporation and the European Bank for Reconstruction and Development (each at US$ 400 million), as well as the Australia’s Export Finance and Insurance Corporation (US$ 150 million). The remaining funds are from 15 commercial banks, including. CIBC. The Multilateral Investment Guarantee Agency (MIGA) provided political risk insurance for the commercial banks.

Click HERE for official statement released by Turquoise Hill Resources

 

From left at signing: J.S. Jacques, CEO Of Rio Tinto Copper; B. Byambasaikhan, CEO, Erdenes Mongol LLC, & Da. Ganbold, CEO of Erdenes Oyu Tolgoi LLC