Export-Import Bank supports mining equipment loan guarantees

The U.S. Export-Import Bank is one step away from final approval of loan guarantees that would save hundreds of jobs at Bucyrus International, the South Milwaukee mining equipment manufacturer.
Thursday, a senior official at the government-run bank said its board of cheap nfl jerseys directors voted unanimously to approve $917 million in financing for Reliance Power Ltd., an Indian power plant operator that would use about $400 million of the money for Bucyrus coal-mining equipment.
The equipment orders were at risk of falling through after the bank - citing environmental concerns over the massive coal project in India - voted earlier to deny the loan guarantees.
Pressured by the White House and Wisconsin's congressional delegation, however, the bank reconsidered.
It has now voted twice to move forward with the loan guarantees and is only about a month away from a final vote.
The deal now goes to Congress for a 30-day comment period. Then it goes back to the bank for a final vote in September or October.
"Unless someone in Congress gets a bee under their bonnet, this should be done" soon, said Bucyrus CEO Tim Sullivan.
Export-Import banks are trade-promotion agencies that provide financing for projects that, collectively, generate billions of dollars in business and stimulate economies.
The U.S. Export-Import Bank did a record-high $21 billion in financing last year, helping U.S. companies get their products overseas.
Now that the bank has voted twice to move forward with the Bucyrus deal, opponents concede it's not likely to be sidetracked.
"There was an enormous amount of political pressure that came to bear on this project," said Michelle Chan with Friends of the Earth, a Washington, D.C., environmental group that opposes the construction of coal-fired power plants.
"This project was unusually politicized," Chan said. "But, going forward, what we really have our eye on is the large coal plants coming down the Cincinnati Bengals jersey pike. We are already looking at the other projects to see if the (Reliance) deal sets a very bad precedent."
Bucyrus, the world's largest mining equipment company, has four more potential deals that would need U.S. Export-Import Bank financing because the loan guarantees allow the borrower to get a lower interest rate.
Those deals in India, Turkey and South Africa could be at risk if they don't meet the bank's environmental standards.
The standards are so high that only sophisticated Chinese-made power plant equipment could meet them, Sullivan said. That puts U.S. power plant builders out of the running for many projects in developing nations, and it puts a damper on sales of U.S. mining equipment if operators of coal-fired power plants turn to other countries for financing.
The slowness at which the U.S. Export-Import Bank moves also could discourage borrowers.
In some countries, export credit agencies issue loan approvals in 60 to 90 days. By the time the U.S. Export-Import Bank makes its final decision on the mining equipment, the Bucyrus deal will have been in the works for nearly a year.
"That is the biggest complaint," Sullivan said. "It has sent a signal to some of our potential Indian customers. They don't want to go through the process."
Now confident that the financing will be approved, Reliance officials are moving ahead with the equipment purchases.
"They are proceeding now as if they have final approval," Sullivan said "The word from the Cleveland Browns jersey Export-Import Bank is they want to complete the process, get the project approved, and then deal with the environmental movement separately on whatever is coming down the pike."