$60 billion for mining private equity a myth

All sorts of numbers have been bandied about regarding size of private equity funds accumulated for investment in the mining sector.

Whether it's at the top end of the thumbsuck scale – the oft-mentioned $60 billion – or in the double digits does not matter all that much.

For the simple reason that after years of talk, the private equity billions destined for the sector remain mostly on the sidelines or are seeking greener pastures.

A report from the Mines and Money meetup in Hong Kong by the Australian Financial Review provides a new, much smaller target, for miners looking for an exit or a lifeline:

[Denham Capital MD Bert] Koth estimates there is around $US12 billion of private equity money ear-marked for the mining sector over the next three to four years.

"This implies there is $US3 billion to $US4 billion available each year," he said.

Mr Koth did echo many speakers at the annual Mines & Money conference in Hong Kong who believe now is the time to build a mining business as asset prices are depressed.

But he said only high grade resources that could be put into production within two to three years would receive funding.

Denham itself has nearly $8 billion to spread around, but by the sounds of it most of that's going into oil and gas.

Energy is the fund's usual hunting grounds where valuations have become highly attractive too.

Continue reading at AFR.com.