KGHM changes Sierra Gorda financing to corporate credit

WSE-listed, state-owned copper and silver giant KGHM has changed the financing model of its Chilean mine in Sierra Gorda to corporate credit from project finance, KGHM said in a market filing. “The nature of the financing will significantly decrease the limitations and duties of Sierra Gorda and in particular will improve the elasticity of operating and financial activities of the mine,” KGHM said. The changes will affect the guarantees issued, by KGHM partner in the project, Japanese Sumitomo Corporation. “On 30 June 2017, the Management Board of KGHM granted permission to issue a re-guarantee of repayment of a specified part of payment, if it is made by Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation towards the financing banks, in the amount equal to the pro rata share of KGHM, but no more than the amount of USD 180 million,” the KGHM statement said. The value of the loan as of June 30 stands at USD 760 million.