Summary of Proposed Investment
Project Number
11127
Company Name
New Africa Mining Fund
Date SPI Disclosed
May 3, 2002
Country
South Africa
Industry
other
Projected Board Date
Jun 6, 2002
Status
Completed
Sector
Private Equity/Venture Cap Fund - Country
Department
Gbl Infrastructure & Natural Resources
Environmental Category
FI
Previous Events
Approved : Jun 28, 2002
Signed : Aug 29, 2002
Invested : Apr 22, 2003
Project Description
NAMF will invest in junior mining ventures and promote junior mining activities in Southern and Central Africa. It will invest in pre-feasibility stage (after the resource has been identified), feasibility study stage, and early stages of production in junior mining projects. The fund will also invest in small-size spin-offs from restructured/reorganized mining companies.
In Canada and Australia, for example, junior mining companies play an important role in bringing new resources into production - they are more effective at grassroots exploration than majors. In South Africa, the development of mineral resources has been dominated by large mining houses with limited participation by junior mining companies. This is due to limited access to mineral rights and lack of access to capital. In February 2000, the South African government together with some South African mining companies and aspirant mining juniors launched the Bakubung Initiative (BI). Its objective was to promote junior mining activities in South Africa. They set out to do so in three ways:
Through the above initiatives, South Africa plans to transform its mining sector - to revitalize it and make it more representative. Junior mining ventures are expected to play an important role in this process. The fund will focus initially on South African opportunities but selective opportunities in the Southern and Central Africa will be considered. By investing in NAMF, IFC will provide long-term funding to junior mining ventures. It will also signal to other providers of funding, especially venture capitalists and the local stock exchanges, to consider investing in junior mining ventures. IFC will assist the fund develop environmental and social guidelines/policies to be used in the evaluation of investment proposals. IFC will assist and support the development of the mentor group.
In Canada and Australia, for example, junior mining companies play an important role in bringing new resources into production - they are more effective at grassroots exploration than majors. In South Africa, the development of mineral resources has been dominated by large mining houses with limited participation by junior mining companies. This is due to limited access to mineral rights and lack of access to capital. In February 2000, the South African government together with some South African mining companies and aspirant mining juniors launched the Bakubung Initiative (BI). Its objective was to promote junior mining activities in South Africa. They set out to do so in three ways:
- Provide input into the revision of South Africa''s mining legislation (the new Minerals Development Bill);
- Facilitate the creation of mining funds to invest in junior mining companies; and
- Facilitate the set up of a mentor group, consisting of persons with extensive mining and financial experience, that would provide junior mining entrepreneurs with training and advice, transferring knowledge and skills.
Through the above initiatives, South Africa plans to transform its mining sector - to revitalize it and make it more representative. Junior mining ventures are expected to play an important role in this process. The fund will focus initially on South African opportunities but selective opportunities in the Southern and Central Africa will be considered. By investing in NAMF, IFC will provide long-term funding to junior mining ventures. It will also signal to other providers of funding, especially venture capitalists and the local stock exchanges, to consider investing in junior mining ventures. IFC will assist the fund develop environmental and social guidelines/policies to be used in the evaluation of investment proposals. IFC will assist and support the development of the mentor group.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Arthur B. Mashiatshidi
Decorum Capital Partners - Fund Manager
Phone: +27 11 644-2458
Fax: + 27 11484-0626
Decorum Capital Partners - Fund Manager
Phone: +27 11 644-2458
Fax: + 27 11484-0626