May 17, 2020

2015 Q1: Mining financing breakdown by region

mine sites
6 min
2015 Q1: Mining financing breakdown by region
SNL Metals & Mining reportThe past several years have unquestionably been particularly challenging for the mining industry. Nevertheless, in spite o...

SNL Metals & Mining report

The past several years have unquestionably been particularly challenging for the mining industry. Nevertheless, in spite of hardships, the mining industry continues to attract new funding. Evaluating financings by the destinations of capital raised shows that the regional distribution is hardly static and that some clear trends can be identified in the geographical distribution of funds from January 2013 through early 2015. While the 2013-2014 periods have been relatively consistent in total funds raised for mining and exploration, 2015 has so far been off to a troubled start.

• Related content: Adani Mining inks deal with Komatsu for Carmichael coal project

During the past nine quarters (January 2013-March 2015), SNL Metals & Mining tracked US$82.92 billion in financing for mining and exploration operations worldwide. SNL also identified the intended global destinations of those financings, either definitively for projects mentioned in company releases, or estimated with help from SNL's 2013 and 2014 Corporate Exploration Strategies studies. The analysis includes financings for all metals and minable commodities (precious and base metals, iron ore, uranium, coal, potash/phosphates and specialty metals such as rare earth elements, graphite and lithium). Except where application to a specific mining project was mentioned by the company raising funds, SNL excluded senior debt in excess of US$500 million, as it usually represents the shuffling of accounts and not direct project financing.

The Asia/Middle East region received the most funding during the period at 20 percent (US$16.92 billion), followed by Latin America with 17 percent (US$14.10 billion) and Australia with 15 percent (US$12.83 billion); the remainder was rounded out by Canada (14 percent), the U.S. (12 percent), Europe — including Russia and central Asia — (10 percent), Africa (eight percent) and Pacific/Southeast Asia (three percent).

Of the almost US$17 billion destined for Asia/Middle East targets, almost two-thirds of the funding came from Asian/Middle Eastern companies (primarily headquartered in China). Although Canadian companies raised the most during the period at US$22.16 billion, less than one-third was allocated domestically. Despite the tough times, Canadian miners continue to focus on assets outside their home turf. By contrast, African and Latin American companies spent 82 percent and 96 percent of their funds, respectively, within their home regions. Of Africa's US$6.69 billion total, only 12 percent was targeted domestically by African companies; in Latin America, 28 percent of the region's US$14.10 billion came from Latin American companies.

The US$39.89 billion raised in 2014 was a slight increase (four percent) over the US$38.23 billion raised in 2013. The year-on-year changes varied regionally. While Australia and Pacific/Southeast Asia held relatively steady in both years, Asia/Middle East increased 19 percent, from US$7.43 billion in 2013 to US$8.87 billion in 2014. Canada experienced the most dramatic shift — more than doubling from US$3.21 billion in 2013 to US$6.59 billion in 2014. These two regions are important for also being the domestic markets for the majority of the world's miners and explorers with listings on the ASX, TSX, Hong Kong and Shanghai exchanges. Financings targeted at Latin America declined 13 percent year on year, from US$6.85 billion in 2013 to US$6.00 billion in 2014, and Africa as a target fell by almost a quarter, from US$3.65 billion in 2013 to US$2.80 billion in 2014.

• Related content: SNL Report: State of the Market--March quarter 2015

An analysis of fundraising by regional headquarters shows a clear increase in domestic spending year on year. Canadian companies raised US$8.04 billion in 2013 and planned to spend 19 percent of the total domestically. In 2014, Canadian companies raised US$11.59 billion and planned to spend 35 percent of the total in Canada — almost doubling the domestic share of spending. Australian companies followed a similar trend, raising US$3.77 billion and allocating 53 percent of it domestically in 2013, and raising US$6.00 billion in 2014 and targeting 73 percent of it domestically.

Evaluating by company type, it is unsurprising that the majors raised most (43 percent) of the US$82.92 billion funding secured between January 2013 and March 2015. Latin America and Asia/Middle East were the top two target regions for the majors — fully 55 percent of the total funding intended for Latin America came from the majors and 44 percent of the total targeted at Asia. Although Europe accounted for only 12 percent of majors' financings, the majors were responsible for 52 percent of the region's total allocations. However, the majors did not dominate in all regions: they were third in Pacific/Southeast Asia with 21 percent (behind the intermediates' 29 percent and the juniors' 27 percent); and in Africa, 46 percent of the total came from the juniors, compared with 31 percent from the majors. The U.S. and Asia/Middle East regions had the smallest shares of the juniors' targeted spending, with 17 percent and 11 percent, respectively.

Among financings allocated by specific commodity (as reported by the companies and captured by SNL Capital Offerings), primary gold projects received the largest share of the total raised during the period. Unlike many other targets, gold financings were relatively evenly divided among the target regions, with similar totals raised for gold projects in Latin America, Canada and Europe. Base metals and silver projects together had the second-largest share, with Latin America in top place, distantly followed by Canada. Copper was the primary commodity targeted by this group. Coal also received a considerable amount of funding, with more than half of coal's allocations going to fund projects in Australia, followed by projects in Europe and Asia. PGM financings were predominantly targeted at South Africa, with smaller amounts for a few Canadian operations. Potash and phosphates received almost as much direct capital as PGM, with most of the funding going to operations in Canada and the U.S. More than half of the funding for diamonds was directed to Canada, followed by Africa and Australia.

• Related content: Downer EDI strikes $100 million contract with BHP Billiton

Financings got off to a poor start in 2015. January was abysmal: With less than US$500 million raised (not including senior debt over US$1 billion), it was by far the worst month in the period for capital-raising. No other month between January 2013 and March 2015 had financings totaling less than US$1 billion. February and March returned to somewhat healthier totals, however, with well over US$1 billion raised in each month.

First-quarter trends in 2015 are somewhat different from those in 2013-2014. Canada-focused financing has moved ahead to take up a third of all funds raised in the year so far, followed by Latin America (26 percent) and Asia/Middle East (13 percent). Things appear most dire in Australia, which attracted 15 percent of total financings in 2013-2014 but has fallen to only five percent of 2015 financings to date. However, although mining-associated fundraising has been largely stagnant in the first quarter, there may be more movement as the year unfolds. A few notable offerings by majors that should make 2015 a more robust year than it has looked so far include First Quantum Minerals Ltd.'s recently closed C$1.44 billion offering to be applied across its portfolio of operations; Zijin Mining Group Co. Ltd.'s recent US$412 million investment in Ivanhoe Mines Ltd.'s Kamoa project in Democratic Republic of Congo; and Rio Tinto's planned US$6 billion campaign to fund underground development at Oyu Tolgoi in Mongolia.

[INFOGRAPHIC] How-To: Gain Equity in the Mining Industry

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Dec 3, 2020

Net zero benefits the mining industry and the environment

digital mining
Dan Brightmore
3 min
Learn how to future proof your business for a zero-carbon world with help from Emitwise and the Oren Marketplace.
Learn how to future proof your business for a zero-carbon world with help from Emitwise and the Oren Marketplace...

How do we get the world to net-zero faster?

Emitwise’s founders, Mauro Cozzi, Eduardo Gómez and Ben Peddie, approached a network of more than 100 of the world's largest enterprises and asked their CEOs, CFOs, and sustainability managers the big question: How do we get the world to net-zero faster? The challenge many shared was the lack of timely and accurate emissions data to enable strategic decisions. Companies often relied on annual audits of their carbon footprint for carbon accounting purposes. However, static yearly results were outdated upon publishing.

Emitwise saves companies an average of 260 working days a year by automating their scope 1, 2 and 3 emissions data. With the added benefits of clean audit trails and auto-populated accounting reports in line with GHG Protocol, all at the click of a button. Their easy to use solution enables businesses to quickly identify the carbon hotspots to target, and the precise real-time data empowers teams to remain agile and respond effectively, making achieving those goals possible.

Unique AI Technology

Emitwise’s unique AI technology empowers businesses to automatically measure, report and reduce their carbon footprint across their operations and supply chain, future-proofing companies for a zero-carbon world. It is the only solution that enables companies to fully automate their carbon accounting across all business units and suppliers, therefore liberating them from the drudgery of collecting and processing emissions data.

By using artificial intelligence to precisely measure emissions in real-time, businesses can identify and tackle carbon hotspots swiftly, enabling them to devise a trackable roadmap to net-zero carbon. At the same time, accurate audit trails and auto-populated annual reports ensure that companies comply with international reporting requirements, and align businesses with global climate targets to mitigate risk across their operations and supply chain. 

The Oren Marketplace

Environmental management, social license to operate, safety, renewable energy to lower emissions and operational efficiency for mining can be supported by a range of digital solutions enabling dynamic operations. To address these issues, Shell and IBM joined forces to create the Oren Marketplace – the first B2B solutions platform for the mining sector. 

With the adoption of many of the digital solutions offered through Oren, mining companies can adapt in real-time to risks or adjust plans ahead of a problem occurring. The goal is a shift towards proactive management as the optimal outcome for all stakeholders – community, shareholders, and employees.

Emitwise was founded with the goal of helping industries across all sectors reduce their carbon footprint. Similarly, Shell aims to become a net-zero emissions energy business by 2050, or sooner, in step with society and its customers. And Oren is focused on offering innovative products and services that can help mining companies track and reduce their emissions. 

“Oren is the starting point for how we help our mining customers to de-carbonise,” explains Carol Chen, Global Lubricants Marketing, Vice President, Shell. “It’s our ambition to work with sectors like mining to help them find their own pathway to net-zero emissions through collaboration. The Oren marketplace offers a great opportunity for collaboration between the miners and technology companies that are joining this digital marketplace.” 

Web Summit

Emitwise will be showcasing its vision for a net-zero future live from Lisbon at this year’s Web Summit. Bringing together the people and companies redefining the global tech industry, the online event welcomes 100,000+ attendees from around the world to hear from more than 800 speakers and view offerings from 2,500 startups covering a vast range of topics from Data Science and Climate Change to AI and Machine Learning. To find out more and book your ticket visit Web Summit. 

Emitwise is one of many solutions providers on the Oren platform seeking to address the pain points and environmental concerns of heavy industries like mining. To discover a range of solutions that can further support your operation’s digital transformation and commitment to sustainability, visit the Oren Marketplace.

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