NEW small-scale mining business is to get a shot in the arm if proposals to establish a R1bn private equity fund – the second in about four years for the sector – take shape.
Decorum Investment Holdings, the founding company of the New Africa Mining Fund (NAMF), are laying plans to establish a second mining fund aimed at exploration and late stage mining projects.
According to the Canada/South African Chamber of Business, the fund will also focus on financing of merger and acquisition strategy as well as management buy-out activities. The chamber also says a third fund focused on infrastructure is also being planned by Decorum which has an unnamed South African bank as a R250m seed funder. It too intends to achieve capital commitments in excess of R1bn, the chamber says. Neil Gardyne, executive director of NAMF, confirms proposals for the fund. “We’ve had these plans for some time. At the moment, it’s just an idea in our heads, but by the year-end NAMF will be fully invested,” says Gardyne.
As of mid-July NAMF had reportedly invested R324.4m of its R563.6m in funds of which some was an equity stake in Namakwa Diamond Company as well as Petmin, the minerals specialist firm which is due to take a secondary listing in London. But it hasn’t proved easy. Initially, when NAMF was being developed from the Bakubung Fund, partly financed by Gold Fields, the intention to raise R1bn. There have also been the odd mishap: NAMF invested in Yomhlaba Coal, an entity supplying coal to BHP Billiton’s Ingwe Coal. Yomhlaba subsequently listed on Johannesburg’s Altx before being suspended amid claims of fraud.
© 2009 Petmin Limited