LIM Advisors seizes opportunity to invest in distressed Asian-Pacific miners
LIM Advisors is looking to position itself to take advantage of opportunities created in the Asia-Pacific mining sector as commodity prices continue to crumble. The Hong Kong-based hedge fund has earmarked $120 million to invest in distressed mining and mining services companies over the next year.
The company views distress as an opportunity, particularly in the mining industry where equity investors have been scared off due to declining commodity prices. LIM Advisors' founder and CEO, George Long, believes it will only get worse before it gets better.
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He told the Australian Financial Review: "There will be a mining and mining services industry in some form at the end of the day, even at the bottom of the cycle...it's not possible in the modern economy to not have a mining industry. But we'll see a lot of consolidation. Junior minors will get wiped out, BHP and RIO will go on.”
According to AFR, the company will use the capital to fund rights issues, convertible stock deals and debt buyouts. In addition, the company will invest in Asia including in Japan and in Chian’s A Shares and H Shares market through its multi-strategy hedge fund.
Long believes China’s economy slowdown will push more companies in the mining and resources segment to the brink. "It's getting worse, we are still in the down turn phase."
Founded in 1995, LIM manages roughly $2 billion in institutional capital and is one of Asia’s largest and oldest hedge funds.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.