Stories by Ayoni M. Agbabiaka
The federal government has packaged a convincing presentation on its New Nigeria Airborne Electromagnetic Surveys Results to drive more investments into the country’s mining sector.
The Minister of Mines and Steel Development, Dr. Kayode Fayemi, who lead the Nigerian delegation to the ‘Investing in African Mining Indaba,’ which kicks off in Cape Town, South Africa on Monday will be making the presentation to the global audience today.
The presentation will be followed by a technical session featuring global and Nigerian mining experts who would discuss the new electromagnetic survey results at an event designated as Nigerian Day at Mining Indaba 2018, at the Cape Town International Conference Centre, Cape Town.
Dr. Fayemi, last December disclosed that the ministry had secured the delivery of 26,000 line kilometer of electromagnetic data, following the payment of
outstanding fees to the consultant that handled the project.
In a statement signed by his special assistant on media, Olayinka Oyebode, added that the ministry would undertake extensive electromagnetic Airborne Geological Survey of promising parts of the country this year, as well as the completion of the National Mineral Database.
According to him Nigeria participation at the 2018 Mining Indaba is expected to serve several strategic objectives, including: “signal to the international mining community, Nigeria’s economic policy priorities which focus on the diversification of the country’s revenue base by repositioning the mining sector for greater productivity.
“Take advantage of the attendance of key decision makers and influencers in the industry from all over the world to engage in high-level economic diplomacy, to address the misconceptions about Nigeria’s mining industry, especially in the light of recent recorded improvements in both hard risk and perceived risk factors in the Nigerian mining jurisdiction as well as improved geological data.
It is also targeted at networking with other government delegates (especially of African countries) and representatives of multilateral organizations, to explore potential areas of cooperation and to ensure Nigeria takes a lead and visible role in advancing the objectives of the African Mining Vision (AVM).
Also it is to “ensure robust tracking of the competitive activities of other mining countries towards identifying ways through which Nigeria can improve the marketability and competitiveness of her mining industry.”
The Investing in Mining Indaba, is regarded as the biggest African mining event with significant interests from governments, organizations, financial institutions and investors within and outside the continent. This year’s event will bring 350 investors and 166 mining companies under one roof.
The Nigerian delegation comprises critical stakeholders, including officials of the Nigeria Geological Survey Agency (NGSA), officials of some state governments in charge of minerals and mining, financial experts, investors and operators.
Private capital investment in copper overtakes gold
Gold projects are no longer the favourite destination of private capital raised for investment in the mining sector as optimism about electric vehicles demand steer funds into battery metals.
Copper overtook gold as the most attractive commodity in 2017, with $1.6 billion in deals representing just shy of 70% of all money flowing into the sector. Battery metals such as lithium, cobalt (which is mined as a byproduct of copper and nickel), vanadium and graphite attracted $175 million from private equity investors according to the report quoted by Bloomberg:
Private-equity deals in the mining industry bounced back in 2017 according to a new report by UK law firm Berwin Leighton Paisner with investment in the sector jumping by more than 30% to $2.3 billion.
43% of fund managers believe it has become easier to find attractive investment opportunities in the metal and mining space.
“With the continued recovery in the sector, 2018 is expected to see an ongoing deployment of capital by the mining private equity funds.Battery metals, copper and gold are expected to continue to be the most popular commodities,” Alexander Keepin wrote in the report.
Despite the carnage on broader financial markets, the copper price surged on Monday adding more than 2% to a high of $3.2575 per pound ($7,182 a tonne) in New York. Copper is up 68% in value over the past two years. Gold was also in positive territory with the metal attracting safe haven buying at $1,344 per ounce.
The amount was still below a peak of $3.2 billion in 2015, when many of the largest mining companies including Freeport McMoran, Barrick Gold and Anglo American were forced to sell off assets to tackle debt piles accumulated during the boom years.
A new survey by private capital tracker Preqin found that 43% of fund managers in the metal and mining space believe it has become easier to find attractive investment opportunities compared to a year ago. A third of the fund managers also say that competition for the best deals in the field has become more competitive.
As of June 2017, the latest data available, mining and metals fund managers hold $6 billion in so-called dry powder (funds ready to be invested) according to Preqin’s 2018 Global Natural Resources report. Diversified natural resource funds have another $26 billion in dry powder, but the bulk of investment by these unlisted funds are destined for oil and gas.
Unlisted mining assets under management total $15 billion according to the London-based research and Preqin identifies 16 funds which are currently raising money for mining investment with a target of $7.9 billion in new money