Capital raising outlook and prospects for African #mining project owners
Africa, being the world’s second most populous continent and one of the richest in natural resources, is bound to draw global attention. Therefore, in terms of mining, #Africa is a significant player to look out for. Africa is home to a number of valuable resources, for example: gold, oil, diamond, uranium and other precious minerals, just to name a few. Furthermore, the current volumes are just a fraction of its full potential, with a various areas still untouched by the world.
In the first speech, “Capital raising outlook and prospects for African mining project owners” by Stephane Lancereaux of Societe Generale Corporate & Investment Banking on Day 3 of the Asia Mining Congress 2012’s Africa session, he mentioned that commodities make up one third of GDP growth for the entire continent. Therefore, mining is an important sector to help spearhead Africa to be one of the next economic superpowers of the future.
However, Mr. Lancereaux went on to establish that with the sheer size of each mining projects increasing rapidly with potential area and space for development, financing these projects is a monumental task. With the need for large amounts of financing, he suggested that mining companies should look into financial instruments in the capital market such as equity, project bonds, convertible bonds and corporate bonds to finance their projects.
Also, he highlighted the key success factors for financing projects in Africa. Mining companies have to demonstrate alignment of interest with the local government, let the benefits of the project accrue to the host country as well as the communities, anticipate and proactively manage pertinent environmental and social issues, ensure traction leverage from project stakeholders and lastly, integrate financing options elements as early as possible. These factors are crucial to ensure the success of the mining projects in Africa.
Then again, the success of mining projects is not possible without political stability and economic freedom from the various host countries.
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