Deutsche signs trade deal with Philippine mining company

Deutsche Bank has signed a $40 million pre-export financing facility with Philippine mineral processing company, Platinum Group Metals, to help support the acquisition, rehabilitation and development works at the company’s two ferronickel smelter plants. This mandate was completed in November 2007.

Platinum's smelter plants, located in the northern Mindanao city of Iligan and town of Manticao, Misamis Oriental, are considered to be investment priority projects for the Philippine government.

These plants capture significantly more off-take value of Philippine mineral output by way of local mineral processing, prior to the export of processed minerals (ferronickel) to the world’s leading stainless steel producers in Australia, Japan and China.

Platinum's ferronickel operations will also provide a ready market for smaller domestic mining companies, again maximising value for the Philippines.

Deutsche Bank’s facility will entail pre-financing of future ferronickel exports from Platinum's smelter plants. The facility includes innovative arrangements to mitigate various risks and also to enable Platinum to optimise its cash flow.

Platinum chairman Ramon Atayde says: “This financing facility allows Platinum to continue and sustain its momentum towards the full phase development of our ferronickel smelter projects, which is consistent with the major push by the Philippine government in developing the mining and mineral processing industries of the country. With foreign investment providing impetus to the Philippine mining and mineral processing industries, support for both project financing and operating capital is made available without the need for securing state guarantees.”

Enrico Cruz, Deutsche Bank’s chief country officer for the Philippines, says: “This tailored financing package provides capital support for a key project in the Philippine nickel industry and ensures Platinum can continue to fund export costs related to its nickel ore and ferronickel operations."

David Barnes, Deutsche Bank’s regional head of structured trade and export finance, global transaction banking, Asia, adds: “We are glad to lead the financing of a priority project of the Philippine government and we look forward to a long-standing relationship with Platinum, as well as with the country’s mining and mineral processing industries."

The landmark deal also comprises a $5 million working capital component to provide continuous support to Platinum's existing mining operations and eventually the smelter operations.