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Johannesburg - While the macro-economic
environment is looking uncertain, evidence suggests that financing for
mining projects in Africa is available, says Standard Bank.
Standard Bank director of mining and metals Vaughan Wickins, said in 2011 alone there had been a number of financings for new mine-related developments.
Speaking at the Mines & Money Conference, Wickins said this was despite mining companies being faced with a raft of complex challenges, including resource nationalism, skills shortage and access to funding.
"The macro-economic environment, with the European debt crisis and volatility raging on, creates a challenging situation for any company seeking finance," he warned.
He said mining companies trying to secure financing in Africa would find that certain commodities will find it easier to raise financing.
These include iron ore, coal or precious and base metals.
While financing is restricted for some commodities such as diamonds and some alloys.
Wickins advised companies to consider the involvement of advisors - which allows the management team to focus on the mine development and maximises the likelihood of a successful financing.
He also said a miner should have a clear understanding of the various funding sources that can be targeted, both debt and equity, and a clear strategy on how and when to approach each source.
Regarding the project itself, he said the company must obviously have a thorough understanding of the project challenges and risk mitigating.
Miners need to be confident in their ability to demonstrate robust economics and use conservative long term assumptions for financing, Wickins advised, adding that a well-planned strategy and coordinated execution was the key to a successful mine financing.
"While the short term market volatility presents challenges to mining companies, we will be focusing on those companies with strong management teams, quality assets, solid track records and a commitment to detailed technical review work. Those are the companies that will weather the storm and secure funding," Wickins said.
Standard Bank director of mining and metals Vaughan Wickins, said in 2011 alone there had been a number of financings for new mine-related developments.
Speaking at the Mines & Money Conference, Wickins said this was despite mining companies being faced with a raft of complex challenges, including resource nationalism, skills shortage and access to funding.
"The macro-economic environment, with the European debt crisis and volatility raging on, creates a challenging situation for any company seeking finance," he warned.
He said mining companies trying to secure financing in Africa would find that certain commodities will find it easier to raise financing.
These include iron ore, coal or precious and base metals.
While financing is restricted for some commodities such as diamonds and some alloys.
Wickins advised companies to consider the involvement of advisors - which allows the management team to focus on the mine development and maximises the likelihood of a successful financing.
He also said a miner should have a clear understanding of the various funding sources that can be targeted, both debt and equity, and a clear strategy on how and when to approach each source.
Regarding the project itself, he said the company must obviously have a thorough understanding of the project challenges and risk mitigating.
Miners need to be confident in their ability to demonstrate robust economics and use conservative long term assumptions for financing, Wickins advised, adding that a well-planned strategy and coordinated execution was the key to a successful mine financing.
"While the short term market volatility presents challenges to mining companies, we will be focusing on those companies with strong management teams, quality assets, solid track records and a commitment to detailed technical review work. Those are the companies that will weather the storm and secure funding," Wickins said.
