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Year update on Private Equity in Mining

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.

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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:

  • Gold remains the most favoured commodity for private equity investors, accounting for over a third (36%) of all deals.
  • By value, Copper was the most popular commodity invested in, attracting $868m.
  • North America continues to see the largest number of deals, with $758m invested in 40 deals.
  • Europe was the only region that had a decrease in the number of deals (6), but has overtaken North America with the total value of those deals hitting $922m.
  • The number of African deals has nearly doubled in 2015, although Africa only saw a 22% increase in the amount invested, $367m.
  • Nearly 10% of all deals were as part of a wider refinancing or restructuring, often including a formal insolvency processes.

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