The exploration and predevelopment phase of mining is a “lonely business”, as banks generally prefer to provide financial support when projects reach the full bankable feasibility stage, and this is affecting new black economic-empowerment (BEE) mining companies entering the market, says the Development Bank of Southern Africa’s (DBSA’s) Jurgen Van Zyl.
He notes that banks and development finance institutions (DFIs) typically avoid risk exposure during this phase, and during this stage of development, junior mines and BEE companies have limited, or no, own resources.
“The tragedy of this is that it may lead to the disposal of assets below their potential market value, and this will undermine the very intentiothe advantages of roll crushern of encouraging BEE investment in the mining sector,” he says.
Van Zyl notes that the DBSA formally included mining in its definition of infrastructure, and said that it would finance off-site and on-site infrastructure in support of mining ventures. However, he says, it realised that a narrow interpretation of this definition could limit the DBSA’s role in junior and early-stage mining transactions, which is the mosstone crusher mobil equipmentt likely route for new BEE entrants into the mining sector, and where the potential development impact is the greatest.
Van Zyl maintains that there is a “strong case” for the bank to get involved in this area. He says that the DBSA makes a clear distinction between exploration companies, and mining companies that intend to mine but need to conduct early work, as it is simply not set up and does not have the staff complementhand held rock crusher canada to deal with exploration companies. He states that it is interested in funding mining projects either in the form of loans or equity, which reduces the risk exposure during the early stages of exploration.
The developmental business case for mining does not happen automatically, says Van Zyl, adding that companies have to work and design for it, with negative impacts being properly managed.
“The problem we face as a relkenya crusher plants for limestoneatively smaller finance institution is that the marginal loan finance may well be greater than we can cope with, which is a problem that even some of the major banks are starting to deal with. “It is important, therefore, to focus on those projects where we can add the most value, and make a substantial contribution,” he says.
Van Zyl says that mining has been an important source of foreign direct investment (FDI) for Sozenith jaw crusher machine 2uth Africa and the Southern African Development Community, with most FDI in the past few years aimed at resource-rich companies. He says that the combination of resource and infrastructure investment is the first step that puts one on the road to beneficiation, adding that it is impossible to beneficiate without effective infrastructure and electricity.
Meanwhile, Van Zyl says that another focus for the DBSA is large-scale regional infrastructure opportunities in support of mining.
“We think we can make an important contribution to environmental infrastructure, and through project involvement, strengthen the policy investment environment. “It is clear to us that mining offers significant development returns, and many opportunities for closer collaboration, specifically around regional geographical opportunities.
“We, therefore, need to work closely with other governments, mining companies, and other DFIs and commercial banks to create inte- grated investment programmes,” he says.