Mine financing: 2015 off to dismal start
A new report by SNL Metals & Mining shows mining financing in the first quarter of the year coming in nowhere near the capital raised in 2013 and 2014.
SNL's research runs the gamut of metals and mineable commodities – from precious and base metals, iron ore, uranium, coal, potash/phosphates to specialty metals such as rare earth elements, graphite and lithium.
The $39.89 billion raised in 2014 was a 4% improvement over 2013, but is still nowhere near the boom days of 2007 to 2009 when more than $100 billion were raised on equity and debt markets for mining projects.
But the first three months of this year has been dismal even compared to the depressed levels of recent years.
Less than $500 million were raised in January and although there was substantial pickup in February and March, 2015 overall could be another very bad year.
In 2013–2014 Canada-focused financing represented 14% of the total – Canadian firms raised the most money at over $22 billion since January 2013, but spent less than half of that at home.
So far this year however Canadian projects have been able to attracts the lion share with more than a third of all capital raised, followed by Latin America (26%) and Asia/Middle East (13%).
From 15% during the course of 2013 – 2014, Australia's share has now dropped to just 5%.
It's not all doom and gloom though.
The authors of the report say a few notable offerings by majors should make 2015 a more robust year than it has looked so far.
These include First Quantum Minerals' recently closed C$1.44 billion offering to be applied across its portfolio of operations; Zijin Mining Group's recent $412 million investment in Ivanhoe Mines's Kamoa project in Democratic Republic of Congo and and Rio Tinto's planned $6 billion campaign to fund underground development at Oyu Tolgoi in Mongolia.