Deep in the Andes Mountains, on a plateau nearly 5,000 meters above sea level, a world-leading mineral processing production line in terms of annual processing capacity is operating at high speed, converting a continuous supply of ore into high-quality copper concentrate. This is the Toromocho Copper Mine, the largest greenfield project invested and developed by Aluminum Corporation of China (hereinafter referred to as "Chinalco") overseas, and also the first world-class copper mine directly invested by China in overseas.
The financial impetus continuously injected into the mine comes from a series of cross-border RMB loans from the Agricultural Bank of China (ABC). From the initial cooperation in 2021 to the loan disbursement in 2024, ABC seized the policy window period, pioneering a new path for financial support for state-owned enterprises' (SOEs) "going global" and adding a brilliant stroke to the internationalization of the RMB.
RMB Loan Helps Chinalco to Build World-Class Toromocho Copper Mine
The Toromocho copper mine is located in the central Andes Mountains, 140 kilometers east of Lima, Peru. It is a world-class super-large copper mine with an annual designed output of 220,000 tons of copper concentrate with a mining life of over 30 years.
In 2007, Chinalco acquired the mine for 840 million U.S. dollars, making it a significant landmark project for Chinese enterprises' proactive engagement in the international resource market. The project was constructed in two phases. The first phase was completed and put into operation in 2014, and entered commercial production in 2015, with an annual processing capacity of 42.192 million tons. The second phase started in 2018, was completed and put into operation in 2021, underwent expansion and renovation in 2023, and was completed in 2024.
The picture shows the site of the Toromocho Copper Mine. (Photo provided by ABC)
As of the end of 2024, the Toromocho project has a reserved ore resource of 2.001 billion tons, with a copper metal content of 8.3687 million tons and an average copper grade of 0.418%. It also contains 247,700 tons of molybdenum and 11,939 tons of silver. It is truly a super-large copper mine with a capacity of over 10 million tons and ranks fifth among copper mining enterprises in Peru. It is also highly competitive throughout South America. The project has processed a total of 428 million tons of ore, produced 2.1 million tons of copper concentrate, achieved a total profit of 2.701 billion U.S. dollars, and has total assets of 5.647 billion U.S. dollars, with a debt-to-asset ratio of 68.74%, demonstrating excellent operational quality and sustainable profitability.
The Toromocho project is large in scale, located at a high altitude and difficult to process. It has achieved a breakthrough of being independently developed and built from scratch by a Chinese enterprise. It features the world's largest single-unit mineral processing production line, with complex technology adopted and stable operation. It has become a model for Chinese enterprises to independently control the entire chain of operations in greenfield projects when going global.
Strong Financial Support Optimizes Chinalco's Global Layout
In 2021, ABC started its first cooperation with Chinalco Peru Mining, providing a project financing of 43.578 million U.S. dollars for the expansion of the second phase of the Toromocho Copper Mine. With the completion of the project's commissioning, the enterprise initiated new financing demands.
In recent years, the USD loan interest rates have continued to rise and the financing costs for enterprises have increased. Meanwhile, the prices of RMB loans are relatively low, and the policy support has been strengthened. Chinalco Peru Mining seized the opportunity and negotiated financing matters with several Chinese banks. ABC Yunnan Branch, which is neighbouring Chinalco's Yunnan-headquartered subsidiary - China Copper Co., Ltd., acted promptly to complete the credit approval for Chinalco Peru Mining and realize the loan disbursement.
In 2024, ABC successfully issued a one-year domestic RMB short-term working capital loan to Chinalco Peru Mining. The loan structure was "domestic RMB loan + forward hedging", with the comprehensive financing rate controlled at a relatively low level. The company can complete the forward foreign exchange purchase in the overseas market and flexibly arrange the RMB settlement, ensuring the cost advantage of financing and effectively hedging against exchange rate risks.
The picture shows the signboard of the Toromocho Copper Mine Project in Peru. (Photo provided by ABC)
To achieve rapid loan disbursement and maximize the policy advantages, ABC adopted a "multi-location collaboration" mechanism. The Huguo Sub-branch of ABC Yunnan Branch took the lead, with joint participation of the Xicheng Sub-branch of Beijing Branch and the Chenggong Sub-branch of Yunnan Branch. By leveraging the credit approval authority of the Free Trade Zone NRA account, the business was efficiently approved and quickly disbursed.
"The loan not only offers a price advantage but also demonstrates ABC's deep understanding of the actual needs of SOEs' 'going global'. From the design of the solution to the settlement arrangement, every link reflects professionalism and efficiency," said a source with Chinalco Peru Mining.
Chinese Firms Write Win-Win Story by Firmer Commitment to Sustainable Development
The success of mineral development cannot be achieved without a commitment to the sustainable development of the environment and the community. Before its own project was completed and there was no wastewater discharge, Chinalco Peru Mining took a long-term perspective and proactively invested in the construction of the Kingsmill Wastewater Treatment Plant. With a daily treatment capacity of up to 110,000 cubic meters, the plant has effectively improved the water quality of the Yauli River and the Mantaro River, becoming a benchmark for water environment governance in Peru.
To improve the livelihoods of the community, Chinalco Peru Mining and the Peruvian government jointly promoted the overall relocation of the town of Morococha. The newly built Morococha New Town covers an area of 1.8 square kilometers, with 1,050 housing units, 7 churches, a multi-functional gymnasium, schools, hospitals, municipal office buildings and more than 30 other public facilities. It has become the first successful relocation of a mining town's original residents in Peru and has received wide acclaim from the international community.
At the same time, Chinalco Peru Mining actively purchased local materials and cultivated local suppliers. In 2024, the total local community procurement exceeded 14 million soles (about 4 million U.S. dollars). It provided financial, tax and marketing training for 253 small- and medium-sized enterprises. It donated high-quality livestock and organized training on epidemic prevention and shearing skills to support the development of animal husbandry.
With stable operations, a strong sense of social responsibility and sustainable development capabilities, Chinalco Peru Mining became the first foreign-funded enterprise in Peru to receive legislative support from the government to solve the problem of mining area relocation. The project has successively won the United Nations' "Best Practice for Global Sustainable Development" and Peru's "Excellence in Mining Award" and other honors.
The shaping of this win-win model project could not have been possible without the key financial support of ABC. The bank's funds, like a stream of living water, precisely empowered the project, providing a solid financial guarantee for it to mitigate risks and achieve sustainable development, and was an important driving force for the project to gain global recognition. (By Zhai Shurui)
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