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Is mining in a financing crisis?
19 May 2009
A roundtable with Mark Tyler and Brad Maxwell, both heads of mining and resources at Nedbank; David Street, managing director of debt finance at Endeavour Financial; John Balsdon, lawyer and city partner at Herbert Smith; Christopher Goss and Sacha Backes, respectively head of investment and investment officer in mining/oil and gas at the IFC; and Andrew Lindsay, finance director at European Nickel which is currently structuring one of the few mining project financings in the market – the Caldag nickel mine in Turkey.
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[mining]
[caldag]
[project finance]
[junior miner]
Mining has been hit hard by the liquidity crunch – both in terms of debt and equity supply. The plummet in commodities pricing has left some of the majors struggling with debt repayments and many juniors are either having to mothball projects or go out of business simply because they cannot raise cash.
With so few projects in the pipeline there is a risk of too little commodities supply when demand returns. Project Finance held a roundtable in London with well-known mining financiers still active in the market to discuss the hurdles to mining projects, funding availability and the potential for new funding sources.
PF: The overall theme is in what ways has the credit crunch impacted on mining and more specifically junior miners?
Lindsay: Given I'm a junior miner I'd better kick off. Everything comes back to the same place – not only the collapse of the debt market...
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