Mayer Brown advises the lenders on the US$823million project financing for the Boleo Mining Project in Mexico
14 October 2010
14 October 2010 – Mayer Brown's global mining group has advised the lending group on the US$823 million project financing to Baja Mining Corp for the construction and development of the Boleo copper-cobalt-zinc-manganese project located in Baja California Sur, Mexico, one of the largest deals of this nature to come to market.
The US$823m project financing, representing the entire amount of debt financing required to develop the project, will be provided to Baja Mining Corp’s project company, Minera y Metalurgica del Boleo S.A. de C.V, by the Export-Import Bank of the United States; Export Development Canada; the Korea Development Bank; and by a group of commercial banks comprised of Barclays Capital (the investment banking division of Barclays Bank PLC), Standard Bank Plc, Standard Chartered Bank, UniCredit Bank AG and WestLB AG. Endeavour Financial acted as financial advisors.
The deal means full-scale construction activities at Boleo can commence imminently.
Baja Mining is a Vancouver, Canada-based publicly traded mine development company with a 70% interest in the Boleo Project, targeted for copper commissioning in 2012. A Korean syndicate of industrial companies holds the remaining 30%. Baja is the project operator.
The Mayer Brown team advised the lenders on the financing and project documentation and was led by Global Head of Mayer Brown’s Mining Group Ian Coles. The team consisted of a cross-office team of partners and associates, including London partners Rachel Speight, Jonathan Hosie and Chris Arnold with associates Pallavi Bedi, Mani Teherani, Avanthi Gunatilake, Sabine Bertin, Nanak Keswani, Christopher Wright and Jonathan Olson-Welsh; partner, Barry Machlin with associate Stephanie Roark advised on the US aspects of the financing from the Chicago office.
Ian Coles, Global Head of Mayer Brown’s Mining Group said: "By anybody's standards the Baja mine is a world class mining project. With the involvement of lenders from a variety of different backgrounds, and with the complexity of the overall financing structure, the dynamics of the deal and the attendant negotiations were unique in many respects, and certainly presented new challenges to all involved. Our global mining expertise allowed us to co-ordinate the effort across offices and move the deal towards signing quickly and efficiently for our clients. The transaction also illustrates that for the correct properly structured deal there remain significant sources of funds in the debt markets".
Mayer Brown's global mining team has extensive experience globally, but particularly in South America. They have recently advised on a number of project financings and transactions in Peru and Chile, including in June this year representing JECO 2 LTD, a joint venture owned by Mitsubishi Corporation, Nippon Mining & Metals Co. Ltd., and Mitsubishi Materials Corporation, in the purchase of an interest in Minera Escondida Limitada in Chile, the largest copper mine in the world.
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