Operations for US$146 million approved for Bolivia, Colombia, Ecuador and Peru

(Caracas, December 2, 1992).- A total of US$146 million in long-term loans was approved to finance projects in the mining and transport sectors of three member countries: Bolivia, Colombia, Peru. Additionally, a line of credit, which CAF has granted to the Ecuadorian Ministry of Finance in September 1990 was increased from US$20 to US$40 million.

Two of these loans will go to the private sector, which is in line with one of CAF’s basic objectives which is to grant funds to Andean businesses or projects considered priority for the development of their countries.

The three projects involved are part of the modernization and structural reform processes which CAF member countries are implementing; for this reason they are aimed at the export sector, and designed to attract local and foreign private investment, improve productivity and trade, and create an effective route for sustainable growth in the long term.

BOLIVIA CAF will contribute with a US$6 million loan to construction and equipping of a mineral concentration plant in the Asientos deposit operated by Compañía Minera Quioma SA, located in Cochabamba department.

This plant will have capacity to process 600 metric tons of mineral a day, especially zinc and iron polymetalics with silver content.

The borrower, Compañía Minera del Sur (COMSUR), is a company with three decades of continuous activity in production and marketing of minerals. Since 1984, it has been developing operations in the Asientos mine through its Quioma subsidiary.

All the production of this mine is exported through the Chilean ports of Arica and Antofagasta via its link to international markets through the national rail network.

At present, the industrial complex in Asientos consists of an underground mine and a concentration mill with all necessary infrastructure to produce 430 tons of mineral a day.

The automotive industry is main market for the zinc and iron.

COLOMBIA A US$60 million loan was approved for the Republic of Colombia for the Transport Corridors Program which consists of two independent subprograms: one road and one rail. The executing agencies are the National Road Fund (FVN) - attached to the Ministry of Public Works and Transport - and Empresa Colombiana de Vías Férreas (FERROVIAS).

The project will restore and upgrade over 1,400 km of roads, 51 road bridges and approximately 740 km of railway, as well as improving safety and services by means of adequate routine maintenance.

The first stage of this road-rail project, with a cost of US$500 million, will be cofinanced by IDB (US$300 million), CAF (US$60 million), and local contributions (US$140 million).

The program is part of the Colombian government’s strategy to open its markets to domestic and foreign competition. In this context, upgrading transport infrastructure in the main corridors and their access routes is vitally important for reducing the costs involved in transport of products.

This is one of the largest loans that CAF has granted to Colombia.

PERU The private company Southern Peru Copper Corporation (SPCC) will receive a US$60 million loan for execution of the Leaching and Extraction Project of the Toquepala and Cuajones Mines, located in southern Peru.

Since 1956, SPCC has been developing the most important mining-metallurgical complex in Peru, formed by the two mines mentioned with the Ilo foundry.

The project, which CAF will cofinance, consists of installation of base mineral processing plants in the Toquepala and Cuajones mines.

For 36 years, enormous quantities of mineral with low copper content have accumulated around these mines in dumps whose reserves exceed 470,000 tons of recoverable copper.

Since 1985, experiments have been made to apply modern bacterial and acid leaching technology - used successfully in countries around the world - which, supplemented by other chemical processes, produces copper cathodes of high purity, all of which are exported.

The total cost of the project is US$130 million, and annual production is planned to reach 35,200 metric tons of high purity cathode copper.

The project includes a series of investments in works to reduce environmental impact to the minimum.

The mining sector contributes almost 45% of Peru’s foreign currency.

ECUADOR The line of credit for the Ecuadorian Ministry of Finance, which was increased from US$20 to US$40 million, will be used for foreign trade operations which favor various sectors of the population, especially low-income groups.

The funds will be used mainly to import equipment and parts for implementation of hydraulic filling programs which will improve the sanitary conditions of a large number of inhabitants of the marginal areas of Guayaquil.