The Japan Bank for International Cooperation (JBIC) has signed a US$180 million loan agreement with Sumitomo Metal Mining to finance the expansion of the Quebrada Blanca copper mine in Chile.

The loan is co-financed with SBI Shinsei Bank, Bank of Fukuoka, Norinchukin Bank, MUFG Bank and Shiga Bank, bringing the total co-financing amount to US$300 million.

It is intended to provide additional funds for the Quebrada Blanca Phase 2 (QB2) project, which is being undertaken by Compañía Minera Teck Quebrada Blanca (CMTQB).

The shareholders are Vancouver-based Teck Resources (60%), Sumitomo Metal Mining and Sumitomo Corporation (together 30%) and Corporación Nacional del Cobre de Chile (10%).

The JBIC has led a series of loans associated with the project since 2019; and this, the largest financing, brings the total debt commitments to US$4.29 billion. Production at the open cast mine, which is located in Tarapaca in northern Chile, began last year.

Copper, the JBIC notes, is increasingly important due to the current trend of decarbonization and is expected to play an indispensable role in renewable energy facilities and equipment, as well as electric vehicles.

Additionally, demand for copper is increasing in facilities adopting new technologies, such as artificial intelligence. Since Japan relies solely on imports for copper concentrates, it is essential to secure a long-term, stable supply of copper resources.

The Strategic Energy Plan, which was approved by the Japanese cabinet in October 2021, set the goal of achieving at least 80% self-sufficiency by 2030 for base metals, including copper. The loans will support the additional development of a copper mine in which Japanese companies hold interests and the securing of a long-term, stable supply of copper resources and, as such, is in line with the Japanese government’s policies.

The JBIC previously signed a loan agreement in project financing with CMTQB, the project proponent, in May 2019, and loan agreements with Sumitomo Metal Mining and Sumitomo Corporation, in June 2019 and March 2023.

In the 2023 financing, the JBIC co-financed a US$625 million loan to Sumitomo Metal Mining, alongside Iyo Bank, Gunma Bank, Shiga Bank, the 77 Bank, Joyo Bank, Nanto Bank, Norinchukin Bank, Hachijuni Bank and Hyakugo Bank, plus a US$125 million loan to Sumitomo Corporation, co-financed with MUFG Bank.

In 2019, the JBIC co-financed loans to the two Japanese companies totalling US$740 million related to the project. Around the same time, the JBIC co-financed loans totalling US$2.5 billion to the project company CMTQB, alongside Export Development Canada, German state-owned lender KfW (under the German Untied Loan Guarantee Programme), Export-Import Bank of Korea and private sector institutions – Bank of Montreal, BNP Paribas, ING Bank, Mizuho Bank, MUFG Bank and Sumitomo Mitsui Banking Corporation.

In October 2023, the project held an opening ceremony, the importance of which was illustrated by the attendance of Chilean President Gabriel Boric, Chilean and Japanese government officials, representatives from local communities in the Tarapacá region, members of financial institutions and representatives of the project partners.

The QB2 project will gradually increase ore throughput and copper concentrate production and, once it reaches full capacity, will be one of the world’s leading copper mines in terms of production.