Voskhod Chromium, a mining operation in western Kazakhstan, has received $260 million in financing jointly arranged by the European Bank for Reconstruction and Development (EBRD) and UniCredit Group, according to a Feb. 23 EBRD press release.
The cross-border investment will enable the facility, which is located in Khromtau in the Aktobe oblast (region) and is a subsidiary of Turkey’s Yildirim Group, to make its operations more efficient and allow it to continue importing best technologies and equipment.
Each entity will provide half of the funding. The loan agreement was signed in London on Feb. 23 in the presence of EBRD President Sir Suma Chakrabarti, Kazakh Prime Minister Karim Massimov and senior representatives of UniCredit.
“We are pleased to support this operation together with UniCredit and to contribute to the expansion of Yildirim Group into a new market,” said Chakrabarti during the signing. “We are also proud to cooperate with the government of Kazakhstan, represented here by the Prime Minister, Karim Massimov, on the reform of natural resources legislation, specifically subsoil use legislation, which will bring it in line with international standards.”
The financing will be used by Yildirim Group to restructure the Voskhod mine and improve its efficiency and competitiveness while reinforcing the overall environmental and operational health and safety standards, according to the press release. The plan also includes the acquisition of new mining equipment from world-class manufacturers, the expansion of facilities and intense underground mine development works.
UniCredit is a European financial and banking services group with thousands of branches distributed in 17 countries and 50 markets, according its website.EBRD, owned by 64 countries and two intergovernmental institutions, works to support the development of market economies and democracies.
To date, EBRD has invested about $7 billion into various sectors of the Kazakh economy, with investments in 2014 alone reaching a record level of about $700 million, according to the press release. The financing, however, is the first for the bank in the chromium sector, said EBRD Managing Director for Energy and Natural Resources Riccardo Puliti, who signed the agreement on its behalf.
“Chromium, which makes steel ‘stainless,’ is an essential material in the world today,” he added, according to the press release. “We are pleased to support Yildirim in this cross-border investment, especially as the Voskhod Chromium project is expected to have a transformational effect on the operations of the mine by introducing new technologies and practices into Kazakhstan for the first time.”
In a separate event the day of the signing, EBRD hosted a meeting of the UK-Kazakhstan Intergovernmental Commission mining subgroup, created through an agreement between UK Prime Minister David Cameron and Kazakh President Nursultan Nazarbayev to support cross-border investment and business cooperation between the two business communities. Recent and anticipated changes in the subsoil use legislation were discussed by delegates including Kazakh Minister for Investment and Development Asset Issekeshev, UK Trade and Investment and UK Export Finance agencies and mining and service companies which are active or are considering investment opportunities in Kazakhstan.