Satisfying Financial Institutions for Major Capital Projects

Abstract

Major capital investments in the aluminum sector require significant financing, often in the hundreds of millions of dollars. Lenders are understandably conservative about transactions of this magnitude, and impose not only contractual and financial obligations, but technical ones as well. A project must be technologically sound, properly staffed and managed, and environmentally acceptable — to the satisfaction of the banks before they will disburse the required capital. With permission from the Billiton Group, two recent examples are presented to illustrate these concepts: the construction of the Hillside smelter in South Africa, and the acquisition of Worsley Alumina in Australia.