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Private equity investment in mining likely to gain momentum in 2015: BLP

https://www.chemnet.com   Feb 10,2015 Platts
Private equity investment in the mining industry is only just starting to gain traction, according to latest research from international law firm Berwin Leighton Paisner Monday, which expects flows to increase in 2015.

According to the research, 2014 proved to be a challenging year for commodity investment as prices came under pressure.

Last year 50 private equity investments were reported, by 30 different funds, weighing in at over $2 billion of money flowing into a wide variety of mining companies.

"Assuming funds seek to deploy their capital over a two to three year investment horizon, there remains at least a further $6 billion to be invested in the next eighteen months to two years," the report read.

It added that "as these funds seek to deploy their capital we can expect further, more significant, private equity investment in the mining industry in the next 12 months."

Looking at the breakdown of the deals in 2014, there were 11 acquisitions, 22 strategic stakes, 14 increases of stakes and three management team backings.

The average investment size was $43.8 million.

Gold was the most favored investment pick for funds, clocking up 15 investments.

"Gold was the most popular commodity for funds purchasing a strategic stake (four), followed by copper...gold was the most popular commodity for funds to increase their stakes or follow their investment with eight deals," the paper read.

North America had the greatest number of acquisitions [six], "significantly more than the next most popular jurisdictions, Africa and Europe with two each."
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