Eurasian Resources Group and Eurasian Development Bank sign a $US95M four year prepayment agreement for iron ore supply
Eurasian Resources Group (ERG), a leading diversified natural resources producer, and Eurasian Development Bank (EDB) have concluded a major financing agreement while attending the 13th Interregional Cooperation Forum of Kazakhstan and Russia. The agreement for a $US95M revolving credit line, signed by Dr Alexander Machkevitch, Chairman of the Board of Managers of ERG, and Mr Dmitry Pankin, Chairman of EDB's Management Board, arranges pre-export financing of iron ore supply from Sokolov-Sarbay Mining Production Association JSC (JSC SSGPO), one of the ERG’s largest companies.
JSC SSGPO is the leading producer of iron ore in Kazakhstan and the major iron ore exporter in the CIS region. The credit line from EDB provides pre-export financing for the plant’s products, including iron-ore concentrate and pellets. The financing will be provided at competitive market rates and is available until November 2020 with the option for a further two-year extension. Combined with the existing long-term sale agreements, this pre-export financing will help maintain the liquidity of the plant.
Mr Dmitry Pankin, Chairman of EDB's Management Board, said: “Fully in line with the mission of the Bank, we are arranging to provide the pre-export financing for JSC SSGPO’s iron ore products that will be shipped to Russia’s Magnitogorsk Iron and Steel Works. One of the world’s leading steel producers, it mainly processes iron ore extracted from the Sarbay and Sokolov mines in Kazakhstan. This project will therefore help develop the cross-border production chain in the iron ore market.”
Dr Alexander Machkevitch, Chairman of the Board of Managers of ERG, said: “The agreement will ensure higher operational stability of JSC SSGPO and will provide long-term guaranteed sales for iron ore products. As an established international financial institution, the deal with EDB complements our earlier agreements with Sberbank and VTB Group to further strengthening the financial position of ERG. The revolving capital line will allow us to maintain the plant’s capacity utilization and will support for the realization of its ambitious development strategy.”