Our annual ‘Private Equity in Mining’ report has revealed that over $3.15bn of private equity investment was injected into mining projects during 2015 over 119 deals.
The research shows a 238% increase in activity and a 57% increase in the amount mining private equity invested when compared with 2014. This had the effect of reducing the average investment size from $40m in 2014 to $26.5m, not surprising with falling equity and commodity prices.
The wider issues in the industry have also encouraged private equity investors to seek alternative structures to generate returns, with 11% of deals in 2015 having exposure to the underlying commodity, for example by way of a royalty. A further 18% of the equity investments were coupled with some form of debt. Taking into account these alternative structures, the total that was invested in 2015 was $4.53bn, doubling the amount invested when compared with 2014.
Other key findings within the report include: