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2. 2. IMPORTANT If you are in any doubt about any of the contents of this prospectus, you should seek independent professional advice. Chinalco Mining Corporation International (Incorporated under the laws of the Cayman Islands with limited liability) GLOBAL OFFERING Number of Offer Shares under the Global Offering : 1,764,913,000 Shares (subject to adjustment and the Over-allotment Option) Number of International Placing Shares : 1,588,421,000 Shares (subject to adjustment and the Over-allotment Option) Number of Hong Kong Offer Shares : 176,492,000 Shares (subject to adjustment) Maximum Offer Price : HK$1.91 per Offer Share plus brokerage of 1%, Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.003% (payable in full on application in Hong Kong dollars subject to refund on final pricing) Nominal value : US$0.04 per Share Stock code : 3668 Joint Global Coordinators Joint Sponsors Joint Bookrunners and Joint Lead Managers (In alphabetical order) Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus. A copy of this prospectus, having attached thereto the documents specified in Appendix VII Documents Delivered to the Registrar of Companies and Available for Inspection, has been registered by the Registrar of Companies in Hong Kong as required by section 342C of the Hong Kong Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any of the other documents referred to above. The Offer Price is expected to be fixed by agreement between the Joint Bookrunners (on behalf of the Underwriters) and the Company on the Price Determination Date which is expected to be on or around Thursday, January 24, 2013 and, in any event, not later than Tuesday, January 29, 2013. The Offer Price will not be more than HK$1.91 per Offer Share and is currently expected not to be less than HK$1.52 per Offer Share. If, for any reason, the Offer Price is not agreed by Tuesday, January 29, 2013 between the Joint Global Coordinators (on behalf of the Underwriters) and us, the Global Offering will not proceed and will lapse. The Joint Bookrunners (on behalf of the Underwriters) may reduce the indicative offer price range and/or the number of Hong Kong Offer Shares below that stated in this prospectus at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offer. In the case of such reduction, notices of the reduction in the indicative offer price range and/or the number of Hong Kong Offer Shares will be published in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offer. Further details are set out in the sections entitled Structure of the Global Offering starting on page 289 and How to Apply for Hong Kong Offer Shares starting on page 297 in this prospectus. The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement are subject to termination by the Joint Global Coordinators (on behalf of the Underwriters) if certain grounds arise prior to 8:00 a.m. on the day that trading in the Offer Shares commences on the Stock Exchange of Hong Kong Limited. Such grounds are set out in the section entitled Underwriting Underwriting Arrangements and Expenses Hong Kong Public Offer Grounds for Termination on page 279 of this prospectus. Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, including the risk factors set out in the section titled Risk Factors in this prospectus. January 18, 2013
3. 3. EXPECTED TIMETABLE(1) Latest time to complete electronic applications under White Form eIPO service through the designated website www.eipo.com.hk(2) . . . . . . . . . . . 11:30 a.m. on January 23, 2013 Application Lists open(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11:45 a.m. on January 23, 2013 Latest time for lodging WHITE and YELLOW Application Forms . . . . . . . 12:00 noon on January 23, 2013 Latest time to complete payment of White Form eIPO applications by effecting internet banking transfers or PPS payment transfer(s) . . . . . . . . . 12:00 noon on January 23, 2013 Latest time to give electronic application instructions to HKSCC(4) . . . . . . 12:00 noon on January 23, 2013 Application Lists close(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12:00 noon on January 23, 2013 Expected Price Determination Date(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 24, 2013 Announcement of the Offer Price; the level of applications in the Hong Kong Public Offer; the level of indications of interest in the International Placing; and the basis of allotment of the Hong Kong Offer Shares to be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) on or before and on our website at www.chinalco-cmc.com and the website of the Stock Exchange at www.hkexnews.hk on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 30, 2013 Results of allocations in the Hong Kong Public Offer (with successful applicants identification document numbers, where appropriate) to be available through a variety of channels, including the websites of the Stock Exchange at www.hkexnews.hk and our website at www.chinalco-cmc.com (see How to Apply for Hong Kong Offer Shares Publication of Results) from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 30, 2013 Results of allocations in the Hong Kong Public Offer will be available at www.iporesults.com.hk with a search by ID function . . . . . . . . . . . . . . . January 30, 2013 Despatch of Share certificates or deposit of the Share certificates into CCASS on or before(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 30, 2013 Despatch of White Form e-Refund payment instructions/refund cheques on or before(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . January 30, 2013 Dealings in the Shares on the Main Board to commence at 9:00 a.m. on . . . . January 31, 2013 (1) All times and dates refer to Hong Kong local time and dates. Details of the structure of the Global Offering, including its conditions, are set forth in the section headed Structure of the Global Offering in this prospectus. (2) You will not be permitted to submit your application through the designated website at www.eipo.com.hk after 11:30 a.m. on the last day for submitting applications. If you have already submitted your application and obtained an application reference number from the designated website prior to 11:30 a.m., you will be permitted to continue the application process (by completing payment of application monies) until 12:00 noon on the last day for submitting applications, when the application lists close. (3) If there is a black rainstorm warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on January 23, 2013, the Application Lists will not open or close on that day. Further information is set forth in the section headed How to Apply for Hong Kong Offer Shares Effect of Bad Weather Conditions on the Opening of the Application Lists in this prospectus. (4) Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC should refer to the section headed How to Apply for Hong Kong Offer Shares Applying by Giving Electronic Application Instructions to HKSCC via CCASS in this prospectus. i
4. 4. EXPECTED TIMETABLE(1) (5) The Price Determination Date is expected to be on or around Thursday, January 24, 2013 (Hong Kong time) and, in any event, not later than Tuesday, January 29, 2013 (Hong Kong time). If, for any reason, the Offer Price is not agreed between the Joint Global Coordinators (on behalf of the Hong Kong Underwriters) and our Company by Tuesday, January 29, 2013, the Global Offering will not proceed and will lapse. (6) e-Refund payment instructions/refund cheques will be issued in respect of wholly successful applications if the final Offer Price is less than the Offer Price payable on application and wholly or partially unsuccessful applications. Applicants who apply on WHITE Application Forms for 1,000,000 Hong Kong Offer Shares or more and have indicated in the WHITE Application Forms that they wish to collect any refund cheque(s) (if applicable) and/or Share certificate(s) (if applicable) in person and have provided all information required by their Application Form, may collect their Share certificates and/or refund cheques (where applicable) in person from the Hong Kong Share Registrar between 9:00 a.m. and 1:00 p.m. on Wednesday, January 30, 2013 or on the date notified by our Company as the date of despatch of Share certificates/e-Refund payment instructions/refund cheques. In order to do so, the applicant must complete the appropriate box on the WHITE Application Form. Applicants being individuals who opt for collection in person must not authorize any other person to make their collection on their behalf. Applicants being corporations that opt for collection in person must attend by their authorized representatives bearing letters of authorization from their corporations stamped with the corporations chop. Both individuals and authorized representatives, as the case may be, must produce at the time of collection evidence of identity acceptable to the Hong Kong Share Registrar. If an applicant has opted for collection in person but does not collect the Share certificate and/or refund cheque (where applicable) by 1:00 p.m. on Wednesday, January 30, 2013, the Share certificate and/or refund cheque (where applicable) will be sent to the address as it appeared on the relevant Application Form in the afternoon on the date of despatch by ordinary post at the applicants own risk. Applicants who apply through the White Form eIPO service by paying the application monies through a single bank account, may have e-Refund payment instructions (if any) despatched to the application payment account. Applicants who apply through the White Form eIPO service by paying the application monies through multiple bank accounts, may have refund cheque(s) sent to the address specified in their application instructions to the designated White Form eIPO Service Provider by ordinary post and at their own risk. Applicants who apply on YELLOW Application Forms for 1,000,000 Hong Kong Offer Shares or more and have indicated in the YELLOW Application Forms that they wish to collect any refund cheque(s) (if applicable) in person and have provided all information required by their Application Form, may collect their refund cheques (where applicable) in person from the Hong Kong Share Registrar between 9:00 a.m. and 1:00 p.m. on Wednesday, January 30, 2013 or on the date notified by the Company as the date of despatch of refund cheques. In order to do so, the applicant must complete the appropriate box on the YELLOW Application Form. The procedure for collection of the refund cheque (where applicable) is the same as that for WHITE Application Form applicant. Share certificate for successful applicant using YELLOW Application Form will be deposited into CCASS for credit to the applicants investor participant stock account or the stock account of the applicants designated CCASS participant. Detailed arrangements are set forth in the section headed How to Apply for Hong Kong Offer Shares Despatch/collection of Share certificates and refund monies in this prospectus. For Applicants who apply for less than 1,000,000 Hong Kong Offer Shares or apply for 1,000,000 Hong Kong Offer Shares or more but have not indicated on their Application Forms that they will collect their Share certificate and/or refund cheques (where applicable) in person, their Share certificate and/or refund cheque (where applicable) will be sent to the address as it appeared on the relevant Application Form in the afternoon on the date of despatch by ordinary post at the applicants own risk. Our Company will not issue any temporary documents of title in respect of the Offer Shares. Share certificates will become valid certificates of title only if the Global Offering has become unconditional and the Underwriting Agreements have not been terminated in accordance with their respective terms, which are expected to be not later than 8:00 a.m. (Hong Kong time) on Thursday, January 31, 2013. ii
5. 5. TABLE OF CONTENTS You should rely only on the information contained in this prospectus and the Application Forms to make your investment decision. We have not authorized anyone to provide you with information that is different from what is contained in this prospectus. Any information not given or representation not made in this prospectus must not be relied on by you as having been authorized by us, the Joint Global Coordinators, the Joint Bookrunners, the Joint Sponsors and the Joint Lead Managers, any of the Underwriters, any of their respective directors, officers or representatives, or any other person or party involved in the Global Offering. Page Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Glossary of Technical Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Special Note Regarding Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Information about this Prospectus and the Global Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Directors and Parties Involved in the Global Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Laws and Regulations Relating to the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 History, Reorganization and Group Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Relationship with Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 Cornerstone Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274 Future Plans and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 Structure of the Global Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289 How to Apply for Hong Kong Offer Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 iii
6. 6. TABLE OF CONTENTS Page Appendix I Accountants Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1 Appendix II Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1 Appendix III Loss Estimate for the Year Ended December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . III-1 Appendix IV Competent Persons Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1 Appendix V Summary of Articles of our Company and Cayman Islands Law . . . . . . . . . . . . . . V-1 Appendix VI Statutory and General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1 Appendix VII Documents Delivered to the Registrar of Companies and Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1 iv
7. 7. SUMMARY This summary aims to give you an overview of the information contained in this prospectus. As it is a summary, it does not contain all the information that may be important to you. You should read the whole document before you decide to invest in our Shares. There are risks associated with any investment. Some of the particular risks in investing in our Shares are set forth in the section titled Risk Factors in this prospectus. You should read that section carefully before you decide to invest in our Shares. OVERVIEW We are a resource development company acting as Chinalcos core platform for the future acquisition, investment, development and operation of non-ferrous and non-aluminum mineral resources and projects overseas. We envision capitalizing on Chinas growing demand for natural resources. Our strong growth potential is driven significantly by Chinalcos active global expansion strategy, which is in line with Chinas initiatives in securing mineral resources overseas to satisfy its growing demand, as well as by Chinalcos proven track record, strong brand recognition and the broad range of acquisition opportunities available to it. Currently, we are focusing on developing the Toromocho Project, which is located in central Peru in the core of the Morococha mining district. According to CRU, the Toromocho Project is the worlds second largest pre-production copper project, as measured by proved and probable copper ore reserves, and the third largest pre-production copper project, as measured by average planned annual production between 2012 and 2020, among the top 20 firm copper mining projects scheduled to commence production of copper concentrates from 2012 to 2016. Three of these mining projects had commenced production as of December 31, 2012. According to the Competent Persons Report, the proved and probable JORC-compliant reserves of the Toromocho Project deposit are estimated to contain approximately 7.3 million tonnes of copper, 290,000 tonnes of molybdenum and 10,500 tonnes of silver. The Toromocho Project is currently our only mining asset, which we expect to rely on for substantially all of our revenue and cash flows for the foreseeable future. We expect to commence production during the fourth quarter of 2013 and reach full production capacity in the third quarter of 2014. Upon commencement of commercial production, we plan to process the copper sulphide ores on-site and sell the copper concentrates primarily to China for smelting and production of refined copper. We expect China to be our primary market. Subject to us receiving arms-length commercial terms, we may also sell our products to Chinalco and its affiliates. We have entered into four binding offtake agreements including definitive pricing terms with four cornerstone investors for the sale of an aggregate of 60% of the Toromocho Projects annual production of copper concentrates for a period of five years from the starting date of production at the Toromocho Project, two of which will automatically continue for another five years thereafter. The Toromocho Project has a long estimated mine life with significant potential for further exploration. Based on the current estimated reserves and production plan, it is estimated that the Toromocho Project can produce ores for 32 years and thus has an estimated mine life of 32 years. Based on the current design, the processing facilities will continue to process recovered ores for four years after the end of the mine life, thus giving the Toromocho Project a projected operating life of 36 years. According to the Competent Persons Report, there are additional resources adjacent to the 1
8. 8. SUMMARY planned open pit, which are also covered by our mining concessions, and are estimated to contain approximately 2.7 million tonnes of copper, 92,000 tonnes of molybdenum and 5,200 tonnes of silver in measured, indicated and inferred JORC-compliant resources. We believe that we will be able to further explore and develop these resources once we complete the highway relocation plan in connection with the Toromocho Project. We are currently in discussion with and have submitted our proposed relocation plan to the MTC. Upon our receipt of approval from the MTC, we will commence the detailed engineering study, which we expect to complete in approximately four months. The following tables summarize our estimated ore reserves and mineral resources in respect of the Toromocho Project as detailed in Appendix IV Competent Persons Report. As our estimated ore reserves and mineral resources come from different parts of the same ore body, they are presented separately. JORC Ore Reserve Category Tonnes (millions) Grade Metal Content Copper (%) Molybdenum (%) Silver (grams/tonne) Copper (million tonnes) Molybdenum (tonnes) Silver (tonnes) Proved . . . . . . . 756 0.51 0.02 6.39 3.9 150,000 4,800 Probable . . . . . . 784 0.434 0.018 7.31 3.4 140,000 5,700 Total . . . . . . . . 1,540 0.471 0.019 6.86 7.3 290,000 10,500 JORC Measured and Indicated Mineral Resources Category Grade Metal Content Tonnes (millions) Copper (%) Molybdenum (%) Silver (grams/tonne) Copper (million tonnes) Molybdenum (tonnes) Silver (tonnes) Measured . . . . . 156 0.41 0.014 6.20 0.6 22,000 1,000 Indicated . . . . . 364 0.36 0.012 6.06 1.3 44,000 2,200 Total . . . . . . . . 520 0.37 0.013 6.10 1.9 66,000 3,200 JORC Inferred Mineral Resources Category (Note) Tonnes (millions) Grade Metal Content Copper (%) Molybdenum (%) Silver (grams/tonne) Copper (million tonnes) Molybdenum (tonnes) Silver (tonnes) Inferred . . . . . . 174 0.460 0.015 11.54 0.8 26,000 2,000 Note: Measured, indicated and inferred mineral resources are not included in the economic analysis in the Competent Persons Report. We expect to enjoy competitive operating and mining costs as a result of the Toromocho Projects rich ore reserves, location and favorable geology. According to the Competent Persons Report, the Toromocho Project is estimated to have low operating cash costs after credits of approximately US$1,508.8 per tonne (or approximately US$0.684 per pound) of copper produced as compared with a large number of copper mines across the globe. For example, the average operating cash costs of the major copper mines in Peru and Chile are approximately US$3,624.0 per tonne of copper produced and US$3,963.0 per tonne of copper produced, respectively. Operating cash costs include mining costs, processing costs, general and administration costs, selling costs, environmental protection costs, production taxes, the resource compensation levy, other cash cost items and the by- product credit, and are generally recognized as a reliable indicator for measuring the operating and mining costs of copper mines. As a result of the geological characteristics, we are able to employ the 2
9. 9. SUMMARY conventional open pit mining technique, which entails lower costs and fewer risks than underground mining. The Toromocho Project also has a low estimated strip ratio at 0.79:1, meaning that for every tonne of ore we mine, 0.79 tonnes of waste materials will need to be removed. As a result, we expect to incur low costs for the removal of waste materials, which results in lower per unit mining costs. Established infrastructure support for the Toromocho Project reduces our construction and operational costs and lowers our operational risks. The Toromocho Project is easily accessible via readily available transportation networks, including public highways and railroads from both the Peruvian capital city of Lima and the major exporting port of Callao. Water and electricity supplies, which are essential to the mining activities, will also be available from nearby facilities developed by us. For example, water for the processing plant will be supplied to the Toromocho Project from the Kingsmill Tunnel water treatment plant developed and operated by us. Electricity will be supplied from the nearby Pomacocha power station, and a 220 MW transmission line will be installed between the power station and the Toromocho Project, which is expected to be ready by the first quarter of 2013. Since the completion of our acquisition of the Toromocho Project in May 2008, we have devoted substantial effort to developing the Toromocho Project into an advanced development stage and accomplished all its key pre-production milestones. We have engaged Aker Solutions, a reputable leading mining consulting firm, for EPCM services in relation to the Toromocho Project. We have outsourced all of our exploration engineering work and most of the Toromocho Project construction work to third-party contractors, including Aker Solutions. We have also secured credit facilities with an aggregate amount of US$2,118.0 million from Eximbank and China Development Bank, which we believe, combined with our cash and cash equivalents, the net proceeds from the Global Offering and additional banking facilities we are negotiating, will provide sufficient funding for us to bring the Toromocho Project to production. The Environmental Impact Assessment in connection with all the material aspects of the Toromocho Project was approved by the Peruvian government in December 2010 and the construction permit for the Toromocho Project was issued by the Peruvian government in July 2011. Furthermore, we have purchased substantially all of the key long-lead equipment and machinery, completed the construction of a new town for local resident resettlement, constructed a water treatment plant to supply and treat water for the Toromocho Project and made investment in the Callao port to facilitate the transportation of the products we will produce. We plan to complete the construction of all the mining and processing facilities in the fourth quarter of 2013. We believe that the comprehensive preparation work that we have done for the Toromocho Project minimizes the risk of delay and puts us on track to achieve our target schedule for development and production. We are controlled by Chinalco, a Fortune Global 500 company since 2008, and a leading metals and mining conglomerate based in China, which has strong brand recognition with respect to its mining, non-ferrous metal smelting and processing activities, and international trading and engineering services. We believe that we will continue to benefit from our relationship with Chinalco by receiving its relevant technological, financial, operational, procurement, sales and marketing support. We believe that by leveraging our close ties with China and Chinalco, we will be able to capitalize on our substantial mineral reserves and the strong demand for copper and other non-ferrous metals globally, particularly in China. 3
10. 10. SUMMARY As of the date of this prospectus, we have not commenced production at the Toromocho Project and have not recorded any revenues and our pre-production activities have not generated any positive operating cash flows. OUR COMPETITIVE STRENGTHS We believe the following competitive strengths will not only distinguish us from our competitors, but also contribute to our success and potential for future growth: Acting as Chinalcos core platform for the future acquisition, development and operation of non-ferrous and non-aluminum mineral resources and projects overseas Our strong growth potential stems in significant respects from Chinalcos active global expansion strategy. As Chinalcos core platform for the future acquisition, development and operation of non-ferrous and non-aluminum mineral resources and projects overseas, we believe that a wide range of potential acquisition opportunities will be available to us. Ability to develop acquired targets and synergistic collaboration with Chinalco We have accumulated extensive experience in the development process of the Toromocho Project. In developing the Toromocho Project, we have leveraged Chinalcos technology and management expertise. We also believe that our close ties with Chinalco will benefit us in selling our products once production commences at the Toromocho Project. Substantial mineral reserves and significant exploration potential at the Toromocho Project to capture the increasing demand for copper According to CRU, the Toromocho Project is the worlds second largest pre-production copper project, as measured by proved and probable copper ore reserves, and the third largest pre-production copper project, as measured by average planned annual production between 2012 and 2020, among the top 20 firm copper mining projects scheduled to commence production of copper concentrates from 2012 to 2016. We believe that our substantial mineral reserves and our close ties with China position us well to capitalize on the expected growth in demand for copper globally, particularly in China. Competitive development and operational costs of the Toromocho Project We enjoy competitive operating and mining costs as a result of the Toromocho Projects rich ore reserves, location and favorable geology. The Toromocho Project is estimated to have low operating cash costs after credits of approximately US$1,508.8 per tonne (or approximately US$0.684 per pound) of copper produced as compared with a large number of copper mines across the globe. The Toromocho Projects close proximity to established infrastructure including water and power supplies and transportation networks, including public highways and railroads, as well as its relative close proximity to Lima, will also lead to reduced construction and operational costs. 4
11. 11. SUMMARY Advanced development stage of the Toromocho Project and the favorable investment environment We have devoted substantial effort to developing the Toromocho Project into an advanced development stage, minimizing the risks of delay, and have accomplished all its key pre-production milestones. We believe that the favorable investment environment in Peru will also facilitate us in ensuring the timely execution of the Toromocho Project. Experienced and motivated international management team supported by local execution experts with proven track record We have an experienced management team with extensive knowledge and expertise in the mining industry, and in particular, the development and acquisition of overseas mining projects. We have proposed to adopt an equity incentive plan designed to attract, retain and incentivize senior management and key employees with a view to encouraging the participants to commit to enhancing value for us and our shareholders, as a whole. OUR BUSINESS STRATEGIES We aim to become a leading diversified-resources company focusing on non-ferrous and non-aluminum mining projects outside China by implementing the following strategies: Engage in strategic and selective acquisition to drive our growth We plan to focus on acquiring or establishing alliances with non-ferrous and non- aluminum mines that are already producing or near production. In the short-term, we plan to prioritize the acquisition of copper mining projects while assessing other non- ferrous and non-aluminum mining projects. In the mid- to long-term, we plan to expand our focus to include other non-ferrous and non-aluminum mines. Geographically, we plan to focus on South America first, and then further extend our reach to Africa and Asia (except China). Ensure timely construction of mining and processing facilities at the Toromocho Project We have started the construction of our mining and processing facilities and target to complete the construction of these facilities in the fourth quarter of 2013. We will continue to collaborate with reputable third-party contractors to ensure a timely and efficient construction process. We also plan to continue to maintain collaborative relationships with the local government and communities to ensure a smooth project development. Optimize our operation and production capacities and further explore and develop potential mineral reserves Our production processes are being developed and refined by our mining and technology experts and are expected to have low consumables and equipment costs and 5
12. 12. SUMMARY improved minerals recovery rates. All of these are essential for a cost efficient mining operation. We have also engaged in detailed feasibility studies and planning activities to efficiently utilize our potential mineral resources at the Toromocho Project. In particular, we plan to procure additional equipment to increase our designed ores processing rate by approximately 26% to 148,000 tonnes per day. Further leverage on our close relationship with Chinalco We will continue to leverage our relationship with Chinalco to obtain relevant technological, financial, operational, procurement, sales and marketing support including its sales network and collaborative relationship with infrastructure developers, equipment suppliers and governments. Attract, motivate and develop talented and experienced staff We plan to continue to focus on the recruitment and cultivation of a high-quality and professional workforce, provide career development programs for our employees, provide competitive compensation packages and create a collegial culture that promotes our employees personal and professional development. Promote corporate social responsibility We plan to continue to undertake international safety, environmental and social responsibility best practices during the construction and production stage of the Toromocho Project. In particular, we plan to continue our dedication in reducing pollution from our operating and mining activities, improving the living standard of the Morococha community and maintaining high workplace safety standards. RELATIONSHIP WITH CONTROLLING SHAREHOLDERS Chinalco, through its wholly-owned subsidiary, COH, indirectly holds 100% of our issued share capital immediately prior to the Global Offering. Although Chinalco will indirectly hold approximately 85% of our issued share capital immediately upon completion of the Global Offering but before the exercise of the Over-allotment Option, the management of the Group as well as the administration, operations and finances of the Group will be independent of Chinalco. To strengthen the delineation of business, Chinalco has confirmed that the Group will act as Chinalcos core platform for the future acquisition, investment, development and operation of non- ferrous and non-aluminum mineral resources and projects overseas. Chinalco has also provided a non- competition undertaking in favor of the Company to the effect that Chinalco itself will not, and will procure its subsidiaries (excluding its listed subsidiaries) not to, directly or indirectly compete with our core business in the regions we operate and has granted the Company a right to acquire competing businesses engaged in by any member of the Chinalco Group (excluding listed subsidiaries of Chinalco), a right of first refusal to acquire competing business opportunities in priority to any member of the Chinalco Group (excluding listed subsidiaries of Chinalco) and a call option over, and a further right of first refusal on any disposal of, any competing businesses over which our Company did not exercise the right of first refusal referred to above. 6
13. 13. SUMMARY The Company has not entered into any offtake arrangements with Chinalco. Although in the cooperation agreement between Chinalco, Yunnan Copper Group and Yunnan SASAC, it was agreed that copper concentrates shall be first offered to Yunnan Copper Group to satisfy its production requirements, the Company believes that this will not affect its operational independence as the demand for copper concentrates has continued to surpass supply in recent years, the global demand for copper is expected to grow in the next few years and Chinalco has undertaken that it will use available measures to procure Yunnan Copper Group not to exercise such right. For additional information about our relationship with our Controlling Shareholders, see Relationship with Controlling Shareholders. ESTIMATED CAPITAL AND OPERATING COSTS Our total capital cost consists of mining costs, process plant and infrastructure costs, the owners cost and contingency. The estimated total capital cost as disclosed in the Competent Persons Report included in Appendix IV to this prospectus was based on the detailed engineering study completed in the second quarter of 2012. Set forth below is our estimated total capital costs based on the Competent Persons Report and the costs incurred as of September 30, 2012: Competent Persons Report Costs incurred as of September 30, 2012(1) (US$ in millions) Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297.4 72.9 Process Plant and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839.5 1,208.1 Owners Cost(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626.2 400.7 Additional Projects(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622.6 355.4 Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,385.6 2,037.1 Contingency Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Process and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.4 Owners Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.0 Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.5 Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.0 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,502.1 2,037.1 Notes: (1) The costs incurred were accounted as cash used in operating activities and cash used in investing activities. (2) Owners cost consists of costs associated with force majeure events, project insurance, social outreach, contract services, licenses and royalties, financial costs, taxes, exchange rate fluctuations, commissioning and pre-operational costs and acquisitions of property. (3) Additional projects consist of the costs incurred in relation to the lime processing plant, Kingsmill Tunnel water treatment plant, double circuit overhead transmission line, central highway relocation, investment in the Callao port, acquisition of certain mining concessions from Pan American Silver with the relevant financing interest, new town construction and resettlement. 7
14. 14. SUMMARY Our estimated operating cash costs for the Toromocho Project consist of mine operating costs, operating costs for the concentrator, molybdenum hydrometallurgical plant and infrastructure, general and administrative costs and our royalty payments to Centromin. Our mine operating costs include all the supplies, parts and labor costs associated with the mine supervision, operation and equipment maintenance. According to the estimation in the Competent Persons Report, which is based on the feasibility study in 2007 with subsequent adjustments, the estimated average annual operating cash costs for the Toromocho Project is approximately US$444.0 million from 2013 to 2049. Over the period, we estimate our operating cash costs to be approximately US$16.4 billion in total. Set forth below is a breakdown of our estimated average annual operating cash costs for the Toromocho Project from 2013 to 2049. See Appendix IV Competent Persons Report in this prospectus for further details. Average Annual Operating Cash Cost from 2013 to 2049 Per unit cost (US$) Cash cost (US$ in thousands) Mining ores and waste . . . . . . . . . . . . . 1.66 (per tonne of material moved) 118,942 Reclaim from stockpile . . . . . . . . . . . . 0.89(1) (per tonne of stockpile moved) 4,516 Processing (milling) . . . . . . . . . . . . . . . 5.28 (per tonne of ores milled) 219,817 Molybdenum plant . . . . . . . . . . . . . . . . 3,612 (per tonne of moly oxide produced) 18,535 Processing infrastructure . . . . . . . . . . . 0.06 (per tonne of ores milled) 2,498 Processing G&A . . . . . . . . . . . . . . . . . . 1.42 (per tonne of ores milled) 59,117 Centromin royalty . . . . . . . . . . . . . . . . . 20,568 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443,993 (1) Not applicable from 2013 to 2044. Based on the current estimation as detailed in Appendix IV Competent Persons Report, income generated by the Toromocho Project will exceed the operating costs starting from January 2014, which is the first full year of production. Based on our current estimation, we will spend another US$1.5 billion for the development of the Toromocho Project for the period after September 30, 2012 and before the commencement of commercial production in the fourth quarter of 2013. 8
15. 15. SUMMARY SUMMARY HISTORICAL FINANCIAL INFORMATION The following summary historical data of consolidated statements of comprehensive income and the consolidated statements of financial position set forth below have been derived from the Accountants Report included in Appendix I to this prospectus. You should read the summary historical financial information below in conjunction with our consolidated financial information included in Appendix I Accountants Report, which have been prepared in accordance with IFRS. Summary Consolidated Statements of Comprehensive Income For the year ended December 31, For the nine months ended September 30, 2009 2010 2011 2011 2012 (unaudited) (US$ in thousands, except for per share data) Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other (loss)/gain, net . . . . . . . . . . . . . . . . . . . . . . . . . . (85) 317 205 130 671 Operating costs General and administrative expenses . . . . . . . . . . (9,053) (11,612) (19,705) (10,396) (17,910) Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,138) (11,295) (19,500) (10,266) (17,239) Finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,896 1,507 451 373 2,169 Finance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,723) (1,088) (2,744) (1,545) (1,887) Finance income/(costs), net . . . . . . . . . . . . . . . . . . . . . 1,173 419 (2,293) (1,172) 282 Loss before income tax . . . . . . . . . . . . . . . . . . . . . . . . . (7,965) (10,876) (21,793) (11,438) (16,957) Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266 3,411 5,281 2,973 3,731 Loss for the year/period . . . . . . . . . . . . . . . . . . . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226) Other comprehensive income for the year/period, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total comprehensive loss for the year/period . . . . . . (4,699) (7,465) (16,512) (8,465) (13,226) Loss per share for loss attributable to the equity owners of the Company (expressed in US$ per share) Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.001) (0.002) (0.001) (0.001) Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
16. 16. SUMMARY Summary Consolidated Statements of Financial Position As of December 31, As of September 30, 20122009 2010 2011 (US$ in thousands) Assets Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347,986 742,898 1,505,001 2,377,368 Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,723 188,959 185,627 241,809 Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177 Equity and Liabilities Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,474 672,536 1,065,984 1,892,532 Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,254 189,358 246,373 361,600 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337,728 861,894 1,312,357 2,254,132 Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,981 69,963 378,271 365,045 Total Liabilities and Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . 359,709 931,857 1,690,628 2,619,177 LOSS ESTIMATE FOR THE YEAR ENDED DECEMBER 31, 2012 All statistics in this table are based on the assumptions that the Over-allotment Option is not exercised. Estimate Estimated consolidated loss attributable to the equity owners of the Company(1) . . . not more than US$21 million Unaudited pro forma estimated loss per Share(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . not more than US$0.002 Notes: (1) The bases on which the above loss estimate has been prepared are set out in Appendix III to this prospectus. (2) The calculation of the estimated loss per Share on a pro forma fully diluted basis is based on the estimated consolidated loss attributable to the equity owners of our Company for the year ended December 31, 2012, assuming that we had been listed since January 1, 2012 and a total of 11,766,084,428.58 Shares had been issued and outstanding during the entire year. The estimate is presented on the bases consistent in all material respects with the accounting policies currently adopted by us as set out in the Accountants Report dated January 18, 2013 (the text of which is set out in Appendix I Accountants Report to this prospectus). OFFER STATISTICS All statistics in this table are based on the assumptions that the Over-allotment Option is not exercised and no options are granted. Based on an Offer Price of HK$1.52 per Share Based on an Offer Price of HK$1.91 per Share Market capitalization(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$17,884.4 million HK$22,473.2 million Unaudited pro forma adjusted net tangible assets per Share(2) . . HK$0.46 HK$0.52 Notes: (1) The calculation of market capitalization is based on 11,766,084,428.58 Shares expected to be issued and outstanding following the Global Offering. (2) The unaudited pro forma adjusted net tangible assets per Share is arrived at after the adjustments referred to in the section entitled Financial Information Unaudited Pro Forma Adjusted Net Tangible Assets on page 223 of this prospectus and on the basis of 11,766,084,428.58 Shares in issue at the respective Offer Prices of HK$1.52 per Share and HK$1.91 per Share. 10
17. 17. SUMMARY NO MATERIAL ADVERSE CHANGE Our Directors confirmed that, as of the date of this prospectus, there has been no material adverse change in our financial or trading condition or prospects subsequent to the Track Record Period. DIVIDEND AND DIVIDEND POLICY We have not declared or paid any dividends since our incorporation. We do not anticipate paying any dividends in the foreseeable future. Subject to the Companies Law and its Articles of Association, the Company in a general meeting may declare dividends in any currency but dividends may not exceed the amount recommended by the Directors. Dividends may not be declared or paid other than out of the profits and reserves of the Company which are lawfully available for distribution. Unless the rights attached to any Shares or the terms of issue thereof otherwise provide, all dividends shall (as regards any Shares not fully paid throughout the period in respect of which the dividend is paid) be apportioned and paid pro rata according to the amounts paid up on the Shares during any period or the portion of any period in respect of which the dividend is paid. See Financial Information Dividend Policy for further details. We are an investment holding company incorporated in the Cayman Islands. Currently, all of our operations are in Peru. For the foreseeable future, our ability to pay dividends will depend substantially on the payment of dividends to us by our subsidiaries in Peru. Our Peruvian subsidiaries may only pay dividends out of their accumulated distributable profits, if any, determined in accordance with their articles of association, and the accounting standards and the laws and regulations of Peru. Moreover, pursuant to relevant Peruvian laws and regulations applicable to our subsidiaries in Peru, our Peruvian subsidiaries are required to set aside a certain amount of their accumulated profits each year, if any, as statutory reserves. These reserves may not be distributed as cash dividends. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. Furthermore, our Peruvian subsidiaries with more than 20 employees are required to distribute 8% of their profits generated in any year among their employees. In addition, our dividend distribution is subject to the terms and restrictive covenants of our existing loans and other financing agreements and may be subject to additional terms and covenants from agreements into which we enter in the future. Pursuant to the loan agreement between Chinalco Peru and Eximbank, Chinalco Peru has agreed not to distribute dividends to its shareholders in any form where there is any principal, interest or other sum thereunder which is unpaid after becoming due and payable. During the Track Record Period, we did not distribute any dividends because we did not generate any distributable profit. 11
18. 18. SUMMARY TAX IN PERU ON CAPITAL GAINS REALIZED ON TRANSFERS OF OUR SHARES Please note that the following is a non-exhaustive summary of the main requirements with regard to capital gains taxable in Peru derived from indirect transfers. To date the Peruvian tax authority has not published detailed rules in relation to this tax. The Company will make an announcement if such detailed rules are published in the future. Prospective purchasers of our Shares should consult their own tax advisors as to the applicable tax consequences, including capital gains subject to tax in Peru, of the purchase, ownership and disposal of our Shares. The Company will include references to this tax and actions that should be taken by prospective investors to comply with it on its website and in the formal notice published by the Company dated January 18, 2013 in relation to the Global Offering. Overview Under Peruvian law, capital gains realized on an indirect transfer of shares in a Peruvian company may, in certain circumstances, be subject to tax in Peru (generally at a rate of 30%). To qualify as an indirect transfer, the transfer must be of shares in a non-Peruvian company which directly or indirectly holds shares in a Peruvian company, and where at least one of the following criteria is met: the market value of the Peruvian company accounted for 50% or more of the market value of the non-Peruvian company at any time during the 12 months preceding the transfer; or the non-Peruvian company is resident in a tax haven (unless the seller can demonstrate that the criterion in the previous bullet point is not met). In addition, if the transferor is not resident in Peru, in order to be taxable the indirect transfer must represent in aggregate 10% or more of the total shares in the non-Peruvian company in any 12- month period. Conversely, if the transferor is resident in Peru, the indirect transfer may be subject to tax in Peru regardless of the percentage in the non-Peruvian company that the transfer represents. In this case, the resulting gain may be subject to tax either as foreign source or Peruvian source income at a rate that will depend on the nature of the investor (corporate or individual). Relevance to investors in our Company Our Company is a non-Peruvian company that holds shares in Peruvian companies (our subsidiaries in Peru), the market value of which subsidiaries accounted for more than 50% of our market value during the 12 months preceding the date of this prospectus. Our Company is also regarded as resident in a tax haven at the date of this prospectus. As a result of this, capital gains realized by a seller not resident in Peru on the sale of 10% or more of our Shares in any 12- month period (or by a seller resident in Peru on the sale of any number of our Shares) may be subject to tax in Peru (generally at a rate of 30%). If so, the seller may be required to undertake a self-assessment process, complete a tax payment form or return issued by the Peruvian tax authority and pay the tax through an authorized Peruvian bank. Alternatively, if the purchaser 12
19. 19. SUMMARY of such Shares is resident in Peru, it may be required to withhold the tax when paying the purchase price. If this tax is payable, it is the gain of the selling Shareholder, as seller of the ultimate beneficial interest in the Shares, that is taxed. We have been advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legal advisor, that Peruvian tax law will disregard the fact that Shares deposited in CCASS are held in the name of HKSCC Nominees and may also be held through a broker or custodian. Consequently, a selling Shareholders gain may be subject to capital gains tax even where legal title to the Shares remains with HKSCC Nominees and where the selling Shareholder and/or the buying Shareholder hold the Shares through the same or different custodians or brokers. The Peruvian capital gains tax would not be payable by the broker(s) or custodian(s) or by HKSCC Nominees, including in circumstances where HKSCC Nominees transfers legal title to a Shareholder to hold directly. Similarly, for the purpose of determining whether a Shareholder has transferred 10% or more of our Shares in any 12-month period, aggregation will apply at the level of the Shareholder (as ultimate beneficial owner) and not at the level of HKSCC Nominees or any broker or custodian. Hence, transfers by different Shareholders would not be aggregated for the purpose of determining whether the 10% threshold is reached solely because all their Shares were held legally in the name of HKSCC Nominees and/or held through the same broker or custodian. At the date of this prospectus, detailed rules for aggregating transfers for the purpose of determining whether or not the 10% threshold has been reached have not been published by the Peruvian tax authority, although it is anticipated that future regulations may address this point. The Company will make an announcement if such detailed rules are published in the future. See Laws and Regulations Relating to the Industry Summary of Peruvian Laws and Regulations Regarding Taxation Tax in Peru on capital gains realized on transfers of our Shares for further details. Selling Shareholder not resident in Peru self-assessment and payment In summary, in order to comply with the obligations imposed under Peruvian law, a Shareholder not resident in Peru who is liable to this tax must follow the process set out on page 117 in the section headed Laws and Regulations Relating to the Industry Summary of Peruvian Laws and Regulations Regarding Taxation Tax in Peru on capital gains realized on transfers of our Shares in this prospectus. Payment by a seller not resident in Peru of any tax due must be made within the first twelve working days of the month after the month in which the sale proceeds are received. Tax that is not paid on time will accrue interest. If a Peru resident purchaser withholds the tax due as set out in the following section, the selling Shareholder is not required to complete the self-assessment process referred to above or pay the tax due. 13
20. 20. SUMMARY Purchaser resident in Peru withholding tax due from purchase price Under Peruvian law, if tax on capital gains is due on a transfer of our Shares by a seller not resident in Peru, a purchaser who is resident in Peru must withhold the tax when paying the purchase price. We have been advised by our Peruvian legal advisor that it is reasonably expected that future regulations will create an exception to this requirement for transfers made on a stock exchange through a central clearing and settling system, where it is impracticable for a purchaser to obtain sufficient information about the seller of the Shares that it purchases. Whilst at present no such exception exists, it is reasonably expected that the withholding requirement would not apply to transfers of our Shares that are centrally cleared and settled through CCASS on the basis that the purchaser would not have sufficient information about the seller to determine whether any capital gains tax should be withheld. Failure by a purchaser resident in Peru to withhold and pay tax will result in a penalty of 50% of the amount not withheld; any unpaid tax will accrue interest and the purchaser would become joint and severally liable with the seller for the unpaid tax. In this case, the seller will also remain liable to pay tax as described under the heading Selling Shareholder not resident in Peru Self-assessment and payment above. Selling Shareholder resident in Peru Shareholders resident in Peru who are liable to tax on capital gains must file the corresponding return and pay the corresponding tax taking into account the tax regime to which they are subject. Peruvian residents must pay tax on capital gains realized on transfers of our Shares regardless of how many Shares they sell the 10% threshold is only relevant to them with respect to determining the source of the income. Failure to file the respective return and pay the corresponding tax will result in a penalty that will depend on the nature of the taxpayer and any unpaid tax will accrue interest. More details in relation to the capital gains tax liability of Shareholders are set out in the section headed Laws and Regulations relating to the Industry Summary of Peruvian Laws and Regulations regarding Taxation Tax in Peru on capital gains realized on transfers of our Shares in this prospectus. Joint and several liability and reporting obligations of our Peruvian subsidiaries A Peruvian company whose shares are transferred indirectly is jointly and severally liable with the non-Peru resident seller who generates the capital gain for the resulting tax if, at any time during a twelve-month period prior to the transfer, the seller and the Peruvian company were related parties for the purpose of the Peruvian Income Tax Law. It is anticipated that the definition of related parties for this purpose will be established in regulations to be published in the future. We have been advised by Rebaza, Alcazar & De Las Casas Abogados Financieros, our Peruvian legal advisor, that there are reasonable grounds to assert that the Stability Agreement signed by Chinalco Peru with the Peruvian Government would prevent the application of this joint and several liability with respect to Chinalco Peru, both because of the unique nature of the liability (which imposes a direct burden on Chinalco Peru) and because the Stability Agreement contains a clause that protects Chinalco Peru against any subsequent change in law which would otherwise void the 14
21. 21. SUMMARY guarantees granted therein. However, there is a risk that the Peruvian tax authority would adopt the position that the joint and several liability applies to Chinalco Peru despite the existence of the Stability Agreement, but if it were to do so Chinalco Peru would have reasonable grounds to defend its position before a tax tribunal. In addition, this joint and several liability would not apply when the purchaser is resident in Peru since such a purchaser would be obligated to withhold the corresponding tax from its purchase price. If we are held jointly and severally liable for such tax liability, our overall tax burden will increase, which may have a material and adverse effect on our business, financial condition, results of operations and prospects. Peruvian companies are required to report to the Peruvian tax authority indirect transfers of their shares. This obligation is not affected by the Stability Agreement. As there is no strict obligation on shareholders to report their indirect transfers of shares in a Peruvian company to that Peruvian company, it would be difficult for the Groups Peruvian subsidiaries to obtain the information necessary to comply with this reporting obligation. To this end we intend to monitor the public disclosures of changes in significant shareholdings in our Company made pursuant to Part XV of the Hong Kong Securities and Futures Ordinance, although this would not always allow the Company to determine whether an indirect transfer has been made. USE OF PROCEEDS We estimate that we will receive net proceeds from the Global Offering ranging from approximately HK$2,565.7 million (assuming an Offer Price of HK$1.52 per Share, being the lower end of the estimated Offer Price range) to HK$3,254.0 million (assuming an Offer Price of HK$1.91 per Share, being the higher end of the estimated Offer Price range), after deducting the underwriting fees and commissions and estimated expenses payable by us in relation to the Global Offering and assuming the Over-allotment Option is not exercised. We intend to use the net proceeds we will receive from the Global Offering for the following purposes: approximately 30% of the net proceeds (approximately HK$769.7 million to HK$976.2 million) to fund the future capital requirements of the Toromocho Project, including commissioning the processing facilities and ramping up production capacity; approximately 30% of the net proceeds (approximately HK$769.7 million to HK$976.2 million) to optimize our capital structure, including repaying the outstanding loan from COH; approximately 30% of the net proceeds (approximately HK$769.7 million to HK$976.2 million) to pursue selective acquisitions of suitable non-ferrous and non-aluminum mining projects and development of the acquired projects; and approximately 10% of the net proceeds (approximately HK$256.6 million to HK$325.4 million) for working capital and other general corporate purposes. 15
22. 22. SUMMARY In the event that the Over-allotment Option is exercised in full, we estimate that we will receive additional net proceeds ranging from approximately HK$396.4 million (assuming an Offer Price of HK$1.52 per Share) to HK$498.1 million (assuming an Offer Price of HK$1.91 per Share). We intend to apply the additional net proceeds to the above uses in the proportions stated above. To the extent that the net proceeds of the Global Offering are not immediately used for the purposes described above, they will be placed on deposit with banks or other financial institutions or held in other treasury instruments. LISTING EXPENSES As of September 30, 2012, we had incurred expenses in connection with the proposed Global Offering of US$4.0 million, which were accounted for as our general and administrative expenses for the nine months ended September 30, 2012. By the completion of the Global Offering, we expect to further incur an estimated amount of US$11.0 million of expenses which is subject to adjustment to be agreed by the Company, the Joint Bookrunners and other parties. We do not believe the additional expenses will have a material impact on our results of operations. LEGAL PROCEEDINGS Construction of New Town We filed three lawsuits against administrative resolutions surrounding the construction permit for the new town of Morococha. We have obtained a preliminary relief that allows us to perform the construction work. The construction of the new town was completed in the third quarter of 2012. We have lost one of the lawsuits at the entry level court and at the court of appeals. We have appealed the decisions to the Peruvian Constitutional Court. Our Peruvian legal advisor is of the view that we have valid ground to obtain a favorable ruling in the appeal, and it is likely the court will follow its decision in granting the preliminary relief and rule in favor of us for the other two cases. Mining Council Resolution We filed two lawsuits to challenge part of a resolution issued by the Mining Council of the MEM that requires additional assessments on the waste materials deposit. We argue that the Mining Council does not have authority to impose requirement not required by law. The land to be used as the waste materials deposit is named Cajoncillo and is owned by us, but there is a third party conducting underground mining activities on the land. We have filed a separate lawsuit to evict this third party. See Land Ownership. Previously, we secured a preliminary injunction that suspended the additional requirement by the Mining Council. However, as the injunction has been overturned, the MEM can request us to conduct the assessment before issuing the mining plan 16
23. 23. SUMMARY permit. As of the Latest Practicable Date, the MEM has not initiated or requested the assessment. Meanwhile, we have engaged a third party consultant to conduct the assessment and obtained a favorable conclusion. We can deliver the assessment report to the MEM if so requested. Based on our communication with the MEM, we still expect to receive the mining plan permit in the first quarter of 2013. Our Peruvian legal advisor is of the view that, as it has been established that the Mining Council has no authority to impose a requirement not required by law, the court will rule in favor of us for both of the two cases and the contingency from these two cases is remote. The local government also challenged the Mining Councils resolution that approves the EIA, arguing that they should have been included in the approval process. It has been established that the claim was filed in a restricted period during which the local government is not allowed to challenge the Mining Councils resolution. Our Peruvian legal advisor is of the view that this case should be dismissed on procedural ground. Also, our Peruvian legal advisor advised us that the Mining Councils resolution approving the EIA is valid, and that the Mining Council has followed all the legal requirements of the approval process. Land Ownership We filed two separate lawsuits over the ownership of the land named Cajoncillo and evict the tenant of another party who claims to be the owner. We plan to use this parcel of land as our waste materials deposit. The Mining Council has requested additional request to be conducted, and we have filed two separate lawsuits against such request. See Mining Council Resolution. We have obtained an injunction that prohibits further mining activities on the land. Our Peruvian legal advisor is of the view that we, as the record owner, are likely to prevail in the two cases. The Yauli community also filed a lawsuit claiming that the sales agreement for a parcel of land purchased by us is not legally binding as we failed to satisfy certain legal requirements. Our Peruvian legal advisor is of the view that the sales agreement is valid and that we have satisfied all the legal requirements, and that we should be able to obtain a favorable ruling. 17
24. 24. SUMMARY RISK FACTORS There are certain risks relating to an investment in our Shares. These risks can be broadly categorized into: (i) risks relating to our business; (ii) risks relating to our industry; (iii) risks relating to doing business in Peru; and (iv) risks relating to the Global Offering. We have highlighted certain of these risks below. A detailed discussion of the risk factors is set forth in the section titled Risk Factors. We may not be able to identify or pursue suitable acquisition opportunities of mining projects and mineral production assets and we may not be able to fully realize the desired benefits from any mining projects or mineral assets that we acquire. There can be no assurance that we will benefit from our relationship with Chinalco to the extent we expect in seeking acquisition opportunities. Moreover, we may face difficulties in integrating the acquired assets into our operations. We may not commence commercial production at the Toromocho Project as planned, our capital expenditure for the Toromocho Project may exceed our current estimates, and the Toromocho Project may not achieve the predicted economic results or commercial viability. The Toromocho Project is subject to design and technical risks and may not operate as expected upon completion. We expect to depend on the Toromocho Project, which is still under development, for substantially all of our revenue and cash flows for the foreseeable future. The Toromocho Project is currently our only mining asset. If we fail to derive the expected economic benefits from it, our financial condition and results of operations may be materially and adversely affected. Failure to achieve our production estimates could have a material adverse effect on our future cash flow, results of operations and financial condition. Actual production may vary from our estimates due to certain risks and hazards. Disputes about the construction permit of the new town of Morococha may result in delay of our resettlement process or materially and adversely impact our financial condition. If the Supreme Court rules against us in these disputes, we may need to apply for a new construction permit which could delay the resettlement process and our production schedule. In addition, the local government may vacate and demolish the new town that has been completed and require us to bear the additional cost of an alternative resettlement plan initiated by the local government, which may materially and adversely impact our financial condition. The additional requirement imposed by the Mining Council may delay the approval process of our mining plan permit, which may result in a delay in our production schedule. 18
25. 25. SUMMARY Our receipt of the mining plan permit may be delayed by the additional requirement imposed by the Mining Council, which may in turn delay our production schedule. Challenges on the Mining Councils resolution may result in delay or suspension of our production, which may have a material adverse impact on our business, results of operations and financial condition. If the local government of Morococha files another judicial claim outside the restricted period and the Supreme Court nullifies the Mining Councils resolution, our production schedule may be delayed or our production activities may be suspended. We may not be able to obtain sufficient financing to fund the expansion and development of our business. In light of current global financial condition, we may not be able to obtain sufficient funding when it is required on commercially acceptable terms. We recorded negative operating cash flow in 2009, 2010, 2011 and the nine months ended September 30, 2012. There can be no assurance that we will record positive operating cash flow in the future. We did not have any revenues during the Track Record Period. There can be no assurance that we will generate sufficient cash flow from our operations in the future. Fluctuations in the market prices of copper and other non-ferrous metals that we may produce from time to time could materially and adversely affect our business, financial condition, results of operations and prospects. Historically, the market prices for copper and other non-ferrous metals have fluctuated widely. Their market prices may fall in the future. 19
26. 26. DEFINITIONS In this prospectus, unless the context otherwise requires, the following expressions have the following meanings: Activos Mineros Activos Mineros S.A.C., a state-owned mining company incorporated under the laws of Peru which is an Independent Third Party and executed the Mining Concessions Transference Agreement of the Toromocho Mining Project with the Company Aker Solutions Aker Solutions Peru S.A., a subsidiary of Jacobs Engineering Group and an Independent Third Party Application Form(s) WHITE application form(s), YELLOW application form(s) and GREEN application form(s), or where the context so requires, any of them, relating to the Hong Kong Public Offer Argentum Compaa Minera Argentum S.A., a company incorporated under the laws of Peru and an Independent Third Party to which Chinalco Peru assigned certain mining concessions Articles of Association or Articles the articles of association of our Company, conditionally adopted on May 8, 2012 and to take effect upon Listing and as amended from time to time, a summary of which is set out in Appendix V to this prospectus associate(s) has the meaning ascribed thereto under the Listing Rules AUD Australian dollars, the lawful currency of Australia Austria Duvaz Sociedad Minera Austria Duvaz S.A.C., a company incorporated under the laws of Peru and an Independent Third Party which executed a framework agreement with the Company relating to certain mining concessions located near the Toromocho Project and to which Chinalco Peru assigned certain mining concessions Behre Dolbear Behre Dolbear Asia, Inc., a wholly-owned subsidiary of Behre Dolbear & Company, Inc., part of Behre Dolbear Group Inc., our independent technical consultant BNP Paribas BNP Paribas Capital (Asia Pacific) Limited Board or Board of Directors the board of directors of our Company Business Day a day on which banks in Hong Kong are generally open for normal banking business to the public and which is not a Saturday, Sunday or public holiday in Hong Kong 20
27. 27. DEFINITIONS CAD Canadian dollars, the lawful currency of Canada Cal del Centro Cal del Centro S.A.C., a company incorporated in Peru and a subsidiary of our Company Callao Concession Agreement the concession agreement relating to a specialized dock for mineral concentrates located in the north of the Callao port, near to Lima, Peru, entered into by and between Transportadora Callao and the Government of Peru, dated January 28, 2011 CCASS the Central Clearing and Settlement System established and operated by HKSCC CCASS Clearing Participant a person admitted to participate in CCASS as a direct clearing participant or general clearing participant CCASS Custodian Participant a person admitted to participate in CCASS as a custodian participant CCASS Investor Participant a person admitted to participate in CCASS as an investor participant, who may be an individual or joint individuals or a corporation CCASS Participant a CCASS Clearing Participant, a CCASS Custodian Participant or a CCASS Investor Participant CCBA China Construction Bank (Asia) Corporation Limited CCBI CCB International Capital Limited Centenario Minera Centenario S.A.C., a company incorporated under the laws of Peru and a subsidiary of our Company Centromin Empresa Minera del Centro del Per S.A., a state-owned mining company incorporated under the laws of Peru which executed the Toromocho Project Option Agreement with Chinalco Peru and assigned its rights and obligations under such agreement to Activos Mineros Chalco Aluminum Corporation of China Limited ( ), a subsidiary of Chinalco and listed on the Stock Exchange, New York Stock Exchange and Shanghai Stock Exchange China or PRC the Peoples Republic of China excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan 21
28. 28. DEFINITIONS China Great Wall China Great Wall Aluminum Construction Corporation, a company incorporated under the laws of the PRC and an indirectly wholly-owned subsidiary of Chinalco Chinalco Aluminum Corporation of China ( ), a state-owned enterprise incorporated under the laws of the PRC and our indirect controlling shareholder Chinalco Canada Chinalco Canada B.C. Holdings Ltd., a company incorporated under the laws of the Province of British Columbia and a wholly-owned subsidiary of Chinalco Chinalco Group Chinalco and its subsidiaries, excluding the Group Chinalco Peru Minera Chinalco Per S.A. (formerly known as Minera Peru Copper S.A. prior to July 25, 2008 and as Minera Peru Copper Syndicate S.A. prior to May 17, 2005), a company incorporated under the laws of Peru and a subsidiary of our Company Chinalco Resources Chinalco Mineral Resources Co., Ltd. ( ), a company incorporated under the laws of PRC and a wholly-owned subsidiary of Chinalco CICC China International Capital Corporation Hong Kong Securities Limited COH Aluminum Corporation of China Overseas Holdings Limited ( ), a company incorporated in Hong Kong, and our direct controlling shareholder Companies Law the Companies Law (2012 Revision) of the Cayman Islands Companies Ordinance the Companies Ordinance (Chapter 32 of the Laws of Hong Kong), as amended from time to time Company and our Company Chinalco Mining Corporation International ( ) (formerly known as Peru Copper Syndicate, Ltd), an exempted company incorporated in the Cayman Islands with limited liability on April 24, 2003 under the Companies Law Competent Persons Report A technical report prepared by Behre Dolbear dated November 2012 Connected Person has the meaning ascribed thereto under the Listing Rules Controlling Shareholder(s) has the meaning ascribed thereto under the Listing Rules and, in the context of this prospectus, refers to COH and Chinalco CRU CRU Strategies, the management consulting division of the CRU Group, providing independent and proprietary advice to the worlds leading metals, 22
29. 29. DEFINITIONS mining and fertilizer companies, suppliers to the industry, governments, and financial institutions CSRC the China Securities Regulatory Commission of the PRC Debt Reorganization Agreement the debt reorganization agreement dated September 30, 2011 between the Company, COH and Chinalco Peru in relation to the Reorganization DGAAM General Bureau of Environmental Matters in Mining Activities under the MEM Director(s) the director(s) of our Company Environmental Impact Assessment or EIA means the Environmental Impact Assessment relating to the Toromocho Project approved by the Mining Council of MEM on December 14, 2010 Eximbank the Export-Import Bank of China, a bank solely owned by the PRC government Global Offering the Hong Kong Public Offer and the International Placing Green Application Form(s) the application form(s) to be completed by the White Form eIPO Service Provider, Computershare Hong Kong Investor Services Limited Group, our Group, we, our, and us our Company and any or all of its subsidiaries together or individually or, where the context so requires in respect of the period before our Company became the holding company of our present subsidiaries, the present subsidiaries of our Company and the businesses carried on by such subsidiaries HK$ and cents Hong Kong dollars and cents respectively, the lawful currency of Hong Kong HKSCC Hong Kong Securities Clearing Company Limited HKSCC Nominees HKSCC Nominees Limited Hong Kong or HK the Hong Kong Special Administrative Region of the PRC Hong Kong Offer Shares the 176,492,000 Shares being initially offered by our Company for subscription under the Hong Kong Public Offer at the Offer Price (subject to adjustment as described in the section headed Structure of the Global Offering to this prospectus) Hong Kong Public Offer the offer of the Hong Kong Offer Shares for subscription by the public in Hong Kong for cash at the Offer Price, on and subject to the terms and conditions described in this prospectus and in the Application Forms relating thereto 23
30. 30. DEFINITIONS Hong Kong Underwriters the underwriters of the Hong Kong Public Offer listed in Underwriting Hong Kong Underwriters in this prospectus Hong Kong Underwriting Agreement the underwriting agreement dated January 17, 2013 relating to the Hong Kong Public Offer entered into among us, COH and the Hong Kong Underwriters, among others HSBC The Hongkong and Shanghai Banking Corporation Limited IFRS International Financial Reporting Standards issued by the International Accounting Standards Board Independent Third Party entity or person who as far as the Directors are aware after having made all reasonable enquiries is not a Connected Person of the Company INGEMMET the Geological, Metallurgical and Mining Institute of Peru International Placing the conditional placing of the International Placing Shares (a) in the United States to qualified institutional buyers in reliance on Rule 144A under the U.S. Securities Act or another exemption from the registration requirement under the U.S. Securities Act, and (b) outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act, including to professional investors in Hong Kong, as further described in the section headed Structure of the Global Offering in this prospectus International Placing Shares the 1,588,421,000 Shares being initially offered for subscription under the International Placing together, where relevant, with any additional Shares that may be issued pursuant to any exercise of the Over-allotment Option, subject to adjustment as described in the section headed Structure of the Global Offering in this prospectus International Underwriters the group of underwriters which is expected to enter into the International Underwriting Agreement to underwrite the International Placing International Underwriting Agreement the underwriting agreement relating to the International Placing and expected to be entered into among us and the International Underwriters on or around January 24, 2013 Joint Bookrunners or Joint Lead Managers Morgan Stanley, BNP Paribas, CICC, Standard Chartered, HSBC and CCBI Joint Global Coordinators Morgan Stanley and BNP Paribas 24
31. 31. DEFINITIONS Joint Sponsors Morgan Stanley, BNP Paribas, CICC and Standard Chartered Juanita Sociedad Minera de Responsabilidad Limitada Juanita de Huancayo, a company incorporated in Peru and 50% of which is currently owned by us Latest Practicable Date January 11, 2013, being the latest practicable date prior to the printing of this prospectus for the purpose of ascertaining certain information contained in this prospectus Listing the listing of the Shares on the Main Board of the Stock Exchange Listing Date the date, expected to be on or about January 31, 2013, on which our Shares are first listed and from which dealings therein are permitted to take place on the Stock Exchange Listing Rules The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (as amended from time to time) MEM the Ministry of Energy and Mines of Peru Memorandum or Memorandum of Association the memorandum of association of the Company, conditionally adopted on May 8, 2012 and to become effective upon the Listing Date, as amended from time to time MOFCOM the Ministry of Commerce of the PRC Morgan Stanley Morgan Stanley Asia Limited MTC the Ministry of Transportation and Communications of Peru Offer Price the final price per Share in Hong Kong dollars (exclusive of brokerage, SFC transaction levy and the Stock Exchange trading fee) at which the Offer Shares are to be subscribed for and issued, or purchased and sold pursuant to the Global Offering, to be determined as further described in the section headed Structure of the Global Offering Pricing and Allocation Determination of the Offer Price in this prospectus Offer Shares the Hong Kong Offer Shares and the International Placing Shares together, where relevant, with any additional Shares issued pursuant to the exercise of the Over-allotment Option Over-allotment Option the option to be granted by our Company to the International Underwriters exercisable by the Joint Global Coordinators on behalf of the International Underwriters, pursuant to which our Company may be required to allot and 25
32. 32. DEFINITIONS issue up to 264,736,000 additional new Shares, representing approximately 15% of the Shares initially available under the Global Offering at the Offer Price, to, among other things, cover over-allocations in the International Placing (if any) as further described in the section titled Structure of the Global Offering in this prospectus Pembrook Mining Pembrook Mining Corp., a company incorporated under the laws of Canada and an Independent Third Party Peru the Republic of Peru (Repblica del Per) Pesares Sociedad Minera Pesares S.A., a company incorporated in Peru and a subsidiary of our Company Phongsaiy Mining Yunnan Copper Industry (Group) Phongsaiy Mining Sloe Co, a company incorporated under the laws of Laos and a subsidiary of Yunnan Copper Group Pomacocha Power Pomacocha Power S.A.C., a company incorporated in Peru and 10% equity interest is owned by our Company Price Determination Date the date, expected to be on or around January 24, 2013 but no later than January 29, 2013, on which the Offer Price is fixed for the purposes of the Global Offering Proinversion the Peruvian Governmental Committee for Private Investment (Comit de la Agencia de Promocin de la Inversin Privada) Proinversion Stability Agreement the tax stability agreement entered into between the Company and Proinversion on November 22, 2011 QIBs qualified institutional buyers as such term is defined in Rule 144A Regulation S Regulation S under the U.S. Securities Act Reorganization the reorganization of the Group, the particulars of which are described in History, Reorganization and Group Structure in this prospectus RMB Renminbi, the lawful currency of the PRC Rule 144A Rule 144A under the U.S. Securities Act SAFE the State Administration of Foreign Exchange of the PRC 26
33. 33. DEFINITIONS SAIC the State Administration for Industry and Commerce of the PRC SASAC State-owned Assets Supervision and Administration Commission of the PRC SAT the State Administration of Taxation of the PRC SCB Standard Chartered Bank (Hong Kong) Limited SERNANP State Protected Natural Areas Agency (Servicio Nacional de Areas Naturales Protegidas por el Estado) SFC the Securities and Futures Commission of Hong Kong SFO the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) Share(s) or ordinary Share(s) ordinary share(s) with nominal value of US$0.04 each in the share capital of our Company Shareholder(s) holder(s) of Share(s) Stability Agreement the Agreement of Guarantees and Measures to Promote Investment (Contrato de Garantas y Medidas de Promocin a la Inversin) entered into on March 9, 2009 between Chinalc