African mining receives private equity injection of R3.5 billion in 2014

by Ina King (Potgieter)

Africa was the recipient of over R3.5 billion in private equity mining investments during 2014, a report released by Berwin Leighton Paisner (BLP) this week describes.

This represents the third largest investment sum by continent, following North American investments that total R11.6 billion, and Australia, at R4.2 billion, although Africa netted nearly a quarter of the total number of project investments over the period.

A total of slightly over R23.1 billion of private equity funds was injected into global mining projects during 2014, through over 50 private equity investments, executed by 30 different private equity funds. Gold was the most frequently targeted mineral, with 15 investments, followed by coking coal, with 6.

Africa Mining IQ allows businesses serving the African mining industry to stay abreast of these developments with accurate, up-to-date and verified project information, provided through the continent’s largest online intelligence database. This database includes listings for over 1 850 projects in Africa on its online database, The Africa Mining IQ database covers extensive listings on the continent’s prominent minerals. These projects include 710 gold, 146 coal, 131 uranium, 117 diamond, 98 platinum and 83 iron ore.

An industry gaining increasing traction

While impressive, BLP’s report highlights that there is still significant investment scope in a market that is beginning to build momentum.

Half the money was invested in 11 acquisitions with an average transaction sum of R1.3 billion. The next most significant investment avenue was the acquisition of strategic stakes, with over R44 billion invested across 22 deals.

Some projects to have been verified as feasible mining developments include

• The Evander Project, South Africa. Covering an area of approximately 5 129 hectares along the northeastern Witwatersrand basin, Evander is a flagship project for renewed gold extraction in southern Africa. The project has an exploration value of R25 million.
• The Mamasota Project, Senegal. An 800 – 1 000 m long gold deposit at oxide depths averaging between 40 m and 80 m below ground will facilitate a high throughput rate for the CIL Plant. The project has an exploration value of R2.8 billion.
• The Mahenge Graphite Project (Epanko), Tanzania. The expansion of Epanko will enhance its graphite output to 100 000 tpa over the next five years. The internally-funded expansion plan indicates an NPV of $251 million.
• The Tete Project, Mozambique. The pig iron and ferrovanadium operations at Tete are based on a Committee-Compliant Resource of 727 million tons that could provide a globally-competitive 1 Mtpa to 4 Mtpa pig iron, ferro-vanadium and steel products operation that would have a life of more than 50 years. There is potential for titanium, vanadium and Platinum Group Metals. The project has a capital value of R12 billion.

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