VTB TO LOAN ARMENIA’S ACP $249.5 MLN FOR DEVELOPMENT OF TEKHUT COPPER FIELD
Interfax News Agency
May 27 2008
Russia
Russia’s VTB Bank (RTS: VTBR) will issue a $249.5-million loan to
Armenian Copper Programme (ACP) for the development of the Tekhut
copper and molybdenum field in northern Armenia, VTB President
and Chairman Andrei Kostin said at a press conference in Yerevan
on Tuesday.
The loan agreement was signed by Kostin and ACP President Valery
Mejlumian, who is also the president of CJSC Tekhut, which was set
up for the realization of the project.
A memorandum on a $257-million loan for the project was signed in
Yerevan in November 2007, Kostin said. "VTB opened a credit facility
of $30 million for ACP via its subsidiary in France last year for
the start of the project and so that work did not stop," he said.
The loan is being issued for 12 years. VTB will be represented in
the project’s management so that it can control cash flows. "The bank
is counting on participation in profit by receiving a certain stake
in the project’s stock, which will then be bought back by the main
shareholder," Kostin said.
In addition, VTB has provided a $78-million loan for the development
of the Agarak Copper and Molybdenum Plant in southern Armenia, he said.
The GeoProMining group, a company with nonferrous metal mining and
processing assets in Georgia, Armenia and Russia that is part of
Russia’s Industrial Investors group, is the sole owner of Agarak
Copper and Molybdenum Plant. The plant increased production 8% to
$49 million in 2007.
The Liechtenstein-registered Vallex F.M. Establishment owns 81%
of ACP, while Russia-based businessman Valery Mejlumian owns 19%.
Preliminary estimates put ore reserves at 450 million tonnes,
containing 1.6 million tonnes of copper and 99,000 tonnes of
molybdenum.
The company plans to annually mine 25,000-30,000 tonnes of copper
and 800 tonnes of molybdenum, which will account for 40%-50% of the
country’s copper production and up to 20% of its molybdenum output.
VTB Bank was Russia’s second largest bank by assets in the first
quarter of 2008, according to the Interfax-100 ranking of the country’s
biggest lending institutions, compiled by the Interfax Center for
Economic Analysis.