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Canadian metals and mining company Teck Resources has signed a $2.5bn recourse project financing agreement to fund the development of the Quebrada Blanca Phase 2 (QB2) project.

The QB2 project, which is one of the world’s largest undeveloped copper resources, will have an initial mine life of 28 years.

Construction of the project was sanctioned by the project partners in last December and first copper production is expected in the second half of 2021.

Compañia Minera Teck Quebrada Blanca S.A. (QBSA) holds the QB2 project and will be the borrower under the financing as part of the agreement.

QBSA is indirectly owned 60% by Teck,  25% by Sumitomo Metal Mining (SMM), 5% by Sumitomo and 10% by Empresa Nacional de Mineria.

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The financing for the project will be directly provided by the Japan Bank for International Cooperation, Export Development Canada, the Bank of Exports and Imports of Korea, the German Government for the Program of Guarantees of Unrelated Loans, KFW IPEX-Bank GMBH, the Bank of Montreal and BNP Paribas SA, ING Bank NV, Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation.

Until the completion of project construction, Teck, Sumitomo Metal Mining and Sumitomo will guarantee the obligations of QBSA under 12 year-facility.

Financing is expected to close before the third quarter of 2019 and the first loan is not expected to be required until the end of 2019.

Rothschild & Co Canada has been appointed as the financial adviser to QBSA for the transaction.