0

The Japan-Argentina Business Cooperation

Committee

Products to Support Businesses for the Development

of Natural Resources by NEXI

December 5, 2014

Nippon Export and Investment Insurance (“NEXI”)

1

1. Profile -About NEXI-

Name Nippon Export and Investment Insurance ("NEXI")

Establishment

April 1, 2001

*as a totally government-owned incorporated administrative

agency

*under the Ministry of Economy, Trade and Industry of Japan

*to efficiently manage trade and investment insurance

business

Head Office 3-8-1 Nishikanda, Chiyoda-ku, Tokyo 101-8359, Japan

Overseas Offices Paris, New York and Singapore

URL http://www.nexi.go.jp/en

2. Main insurance products and performance

■Main insurance products:

① Insurance for Export: Export Credit Insurance

② Insurance for Loans: (i) Buyer’s Credit Insurance (Loans tied to export contracts)

(ii) Overseas Untied Loan Insurance (“OULI”)

③ Insurance for Investment: Overseas Investment Insurance

■Performance (Underwritten Amount for the year ended March 31, 2013)

（※1USD=117.53 JPY TTM rate as of November 21, 2014）

Type of

transaction

Underwritten amount Share

(%)(millions of JPY) (millions of USD)

Insurance for

export

6,897,247 58,685 81.0%

Insurance for

loans

899,875 7,657 10.6%

Insurance for

investment

611,679 5,204 7.2%

Reinsurance 108,365 922 1.2%

Others 5 0 0.0%

Total 8,517,171 72,468 100%

Asia51.0%

Europe11.7%

Middle East10.1%

Central America8.0%

South America

6.2%

Africa4.9%

North America3.6%

Oceania2.8%

International Organization

1.7%

(By Region)

2

3

This Insurance covers losses suffered by a Japanese commercial bank as a result of providing loans tied to

an export contract between a Japanese exporter and a foreign importer, due to

(i) Political Risks such as war, revolution, prohibition of foreign currency exchange, suspension of

remittance or force majeure such as natural disaster or

(ii) Commercial Risks such as bankruptcy or default of an importer

In line with international agreements (OECD and Berne Union)

※ Japanese commercial banks extend loans in

cooperation with the Japan Bank for International

Cooperation (JBIC), and NEXI provides the

insurance for loans extended by commercial

banks.

JapaneseExporter

JBIC※Japanese

Commercial

Banks

Export Contract

×

ForeignImporter

Inability to Repay

Loan

Buyer’s Credit Insurance

Insurance for loans (Buyer’s Credit)

3. Buyer’s Credit Insurance

4

Japanese

Company

or

Bank

Overseas Untied Loan Insurance

Foreign

Government

or

Foreign

Company

Loan/Purchase of Bonds

Inability to Repay

×

Insurance for loan of business funds or bond purchase

4. Overseas Untied Loan Insurance (“OULI”)

This insurance covers losses suffered by a Japanese company or commercial bank that provides a foreign

government or a foreign company with the long-term loans used for a project involving Japanese businesses

due to

(i) Political Risks such as war, revolution, prohibition of foreign currency exchange, and suspension

of remittance

(ii) Commercial Risks such as bankruptcy/default of the borrower or the bond issuer.

5

OULI also covers losses suffered by a Japanese company or a commercial bank that extended guarantee to

the borrowings by its overseas subsidiary or a foreign government or company.

Insurance for guarantee of obligation

Japanese

Company,

Banks, etc.

Overseas Untied

Loan Insurance

Foreign

Government

or

Foreign

Company

Debt Guarantee

Financing

×

Bank

Inability to Repay

4. Overseas Untied Loan Insurance (“OULI”)

6

This insurance covers losses suffered by a Japanese company with its subsidiary or its joint venture in a foreign

country, due to

I. discontinuation of the relevant subsidiary or the joint venture business due to force majeure such as

war, terrorism and natural disaster

II. the subsidiary’s or the joint venture’s inability to remit dividends to Japan due to prohibition of foreign

currency exchange or suspension of remittance

Japanese

Company

Overseas Investment Insurance

Foreign Company

(Overseas Affiliated Company,

Joint Venture, etc.)

Investment

Inability to

Remit Dividends

×

Discontinuation of

Business Activities×

Insurance for investment (equity investment, etc.)

5. Overseas Investment Insurance

7

Country B

Country ACountry Y

When a Japanese subsidiary establishes sub-subsidiaries in a number of countries, one sub-subsidiary’s failure

to continue business can be recognized as an insured event and insurance claims will be paid, regardless ofthe other sub-subsidiaries’ performance.

JapaneseCompany

Overseas InvestmentInsurance

Sub-subsidiary B

Overseas InvestmentInsurance

×

Sub-subsidiary A

SubsidiaryInvestment

Discontinuation ofBusiness Activities

Investment

×

Investment

5. Overseas Investment Insurance

8

When a Japanese subsidiary in a foreign country establishes a number of sub-subsidiaries in the same country,

one sub-subsidiary’s failure to continue business can be recognized as an insured event and insurance claims

will be paid, regardless of the other sub-subsidiaries’ performance.

Overseas Investment

Insurance

Country Y

Japanese

Company

Sub-subsidiary B

Overseas Investment

Insurance

×

Sub-subsidiary A

Subsidiary

Investment

Discontinuation of

Business Activities

Investment

×

Investment

The other type of Overseas Investment Insurance covers rights and acquired profits (real

estate, etc.), while above insurance covers investment (equity investment, etc.).

5. Overseas Investment Insurance

9

NEXI further strengthens support for Japanese companies’ activities from a perspective of securing a stable

natural resource supply with cover for senior loans, investment and subordinated loan.

Off-taker

Off-takeJapan

Japanese

Bank

RepaymentProceeds from

resource sales

First-class bank

escrow accountin a developed country

Overseas resource project company

Energy and

resources

Long-term

borrowings

Subordinated

loan

Shareholders’

equity

Senior loan

Production

facility

Mining

concession

Lending

Investment and

Loan Insurance

for Natural

Resources and

Energy

Features

■A senior loan should be made by a Japanese company for stake or right acquisition or off-take in projects of energy and

resources.

■Generally, the establishment of an escrow account at a first-class bank in a developed country is required.

■ Lower premium rates and higher percentage of cover are applied compared with the Overseas Untied Loan Insurance.

Cover for senior loans

6. Investment and Loan Insurance for Natural Resources and Energy

Japan

10

Overseas resource project company

Japanese

Company

Investment

Assets

Long-term

borrowings

Subordinated

loan

Shareholders’

equity

Investment and Loan Insurance for

Natural Resources and Energy

Subordinated loan

Japan

Features

■An investment or a subordinated loan should be made by a Japanese company for stake or right acquisition or off-take in

energy or natural resource projects.

■A higher percentage of cover is applied to an investment in a resource and energy project compared with the Overseas

Investment Insurance.

■Lower premium rates and higher percentage of cover are applied to a subordinated loan for resource and energy projects

compared with the Overseas Untied Loan Insurance.

Cover for investment and subordinated loans

6. Investment and Loan Insurance for Natural Resources and Energy

11

Mineral

SpeciesYear Country Transaction / Project Name Type of Insurance

Iron Ore 2013 Australia Roy Hill iron ore project OULI

Lithium 2013 Argentina Salar de Olaroz Lithium Development Project (1) Investment

Coal 2012 Columbia Drummond Coal Mine Project OULI／Investment

Iron Ore 2012 Brazil Samarco Fourth Pellet Plant Construction Project OULI

Coal 2012 Russia SUEK Coal Mine and Port Expansion Project OULI

Copper 2011 Chile Sierra Gorda Copper Mine Project (2) OULI

Copper 2011 ChileCaserones Copper/Molybdenum Deposit

Development Project (3)OULI

Iron Ore 2011 Brazil Samarco Project OULI

Copper 2010 Canada Similco Copper Mine Redevelopment Project OULI

Boron 2008 Russia Boron Plant Expansion Project OULI

Iron Ore 2009 Brazil Nacional Minerios S.A. (NAMISA) (4) Investment

Copper 2008 Peru Cerro Verde Copper Mine Project Investment

Nickel 2007 Madagascar Ambatovy Nickel Mine Project Investment

Uranium 2007 Kazakhstan Kazakhstan Uranium Deposit Development Project OULI

7. Main Transactions with Investment and Loan Insurance for

Coals and Mineral Resources (as of December 2014)

OULI: Overseas Untied Loan Insurance

12

• Toyota Tsusho Corporation has invested in the Salar de Olaroz lithium resources development project in

Argentina.

• This project is planning to produce 17,500 tons of lithium carbonate per annum by pumping brine of Salar

de Olaroz in Argentina.

• It is expected to contribute to a steady supply of lithium carbonate that is a raw material for the production

of lithium-ion batteries, essential for next-generation vehicles such as electric cars.

• NEXI has provided Overseas Investment Insurance for this investment made by Toyota Tsusho

Corporation through its subsidiary.

8. Case (1)

Argentina / Salar de Olaroz Lithium Development Project

Photograph courtesy / Toyota Tsusho Corporation

Overseas Investment Insurance

(Investment and Loan Insurance for Natural

Resources and Energy)

Investment Destination Sales de Jujuy S.A.

Insured value USD 53.68 million

Covered risk Political risk 100％

Tenor 10 years

(Reference)

Type of insurance

13

• Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation have undertaken development of the Sierra

Gorda copper mine, which is jointly owned with a Canadian company.

• NEXI provided Investment and Loan Insurance for Natural Resources and Energy for the loan provided by

the lenders shown in reference for this project.

• Sumitomo Metal Mining and Sumitomo Corporation own 45% of the project interests. This project will

produce 220,000 tons of copper concentrate per year, and 50% of the production will be off-taken by

Sumitomo Metal Mining, which will contribute to secure stable supply of those resources for Japan.

8. Case (2)

Chile / Sierra Gorda Copper Mine Project

Photograph courtesy / Sierra Gorda SCM

(Reference)

Mizuho Corporate Bank, Ltd.

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

The Sumitomo Trust and Banking Company

Limited.

Type of Insurance Overseas Untied Loan Insurance(ENRI)

Insured Amount USD 300 millionn

Covered RisksPolitical Risk 100%

Commercial Risk 97.5%

Tenor About 9.5 years

Insured

14

• Pan Pacific Copper Co., Ltd. (“PPC”) —a joint venture of JX Nippon Mining & Metals Corporation and

Mitsui Mining & Smelting Co., Ltd.— and Mitsui & Co., Ltd.(“Mitsui”) have undertaken development of the

Caserones Copper and Molybdenum Deposit in central Chile, in which PPC and Mitsui together hold a

100% interest.

• NEXI provided Investment and Loan Insurance for Natural Resources and Energy for the loan provided by

the lenders shown in reference for this project.

• PPC and Mitsui will purchase all of the project’s copper concentrate production, estimated at about

150,000 tons a year, equivalent to about 11.5% of Japan’s annual import of copper concentrates, so that

will contribute to secure stable supply of those resources for Japan.

• As the mine is operated by Japanese companies, it will also help maintain and improve mining technology

and develop human resources in mining sector of Japan.

8. Case (3)

Chile / Caserones Copper and Molybdenum Deposit Development

Project

Photograph courtesy / Pan Pacific Copper Co., Ltd.

(Reference)

Mizuho Corporate Bank, Ltd.

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

The Hongkong Shanghai Banking Corporation

Limited, Tokyo Branch

Type of InsuranceOverseas Untied Loan Insurance(ENRI) for

Natural Resources and Energy

Insured Amount USD 330 millionn

Covered RisksPolitical Risk 100%

Commercial Risk 97.5%

Tenor About 15 years

Insured

15

• This is a project where a consortium consisting of a syndicate of Japanese companies, including ITOCHU

Corporation, and Korean steel producer POSCO made a 40% investment in Nacional Minerios S.A.

(NAMISA), which owns an iron ore mine the state of Minas Gerais, Brazil, and produces and exports iron ore.

• NEXI provided Investment and Loan Insurance for Natural Resources and Energy for ITOCHU Corporation’s

investment in NAMISA established in the Federative Republic of Brazil.

• NAMISA started exporting iron ore to Japan in 2008. The export of iron ore to Japan will be increased from

2009 and beyond since NAMISA has signed an agreement for offtaking iron ore with Japanese steel

producers through this investment.

8. Case (4)

Brazil / NAMISA Iron Ore Project

NEXI

Investment Insurance for Natural Resources

and Energy

Japanese SPC JV1

NAMISA

JV2

5 Japanese Steel Makers

ITOCHU Corporation

Off-take

Equity Equity Equity

Equity Equity

16

Type Year Country Transaction / Project Name Type of Insurance

LNG 2014 Indonesia Donggi Senoro LNG project OULI

Shale LNG 2014 U.S.A Freeport LNG Project OULI／Investment

Shale LNG 2014 U.S.A Cameron LNG Project OULI

Gas Condensate 2014 Papua New Guinea Upstream Gas and Condensate Development Project Investment

Crude Oil 2013 Angola Block 14 Development Project Investment

LNG 2012 Australia Ichthys LNG Project OULI

LNG 2009 Papua New Guinea PNG LNG Project OULI

LNG 2009 Russia Sakhalin Ⅱ Phase 2 Project OULI

9. (Reference)

Main Transactions with Investment and Loan Insurance for

Oil and Gas Projects (as of December 2014)

OULI: Overseas Untied Loan Insurance

17

Thank you very much for your

kind attention!

Nippon Export and Investment Insurance

Disclaimer

The information and the data underlying this material has been obtained from or based upon sourcesconsidered by NEXI to be credible and accurate as of the date of its preparation. NEXI, however, representsor warrants no assurance that the information, data or any computation based thereon are accurate orreliable and are subject to change without notice.

Copyright of this material is held by NEXI. Any quotation, reproduction or redistribution of this material orthe content thereof without permission for subsequent use for any purpose whatsoever is strictly prohibited.