The mining industry has established a development fund to provide capital to junior mining entrepreneurs to exploit opportunities across the African continent, a trustee of the fund said on Tuesday.
Mining company Goldfields Limited said in a statement the New African Mining Fund (NAMF) was an outcome of the Bakubung Initiative, an industry stakeholder forum established in 2000, to develop effective and practical solutions to address challenges facing the mining industry.
The launch of the fund comes only a few weeks after the signing of the new Mineral and Petroleum Resources Development Act and the publication of the Mining Industry Charter by government earlier this month.
The South African government supported the development of the NAMF and had contributed to its formulation, Goldfields said. The aim of the NAMF was to make capital for junior mining entrepreneurs more accessible, while providing investors with competitive returns over the period in which their capital was invested. The fund was not meant to be a social investment project. The NAMF would invest in junior mining opportunities by buying between 10 and 45% non-controlling equity stakes in each project.
”The fund aims to promote the development of sustainable junior mining companies and therefore will only consider investing in commercial opportunities that represent prospects of creating real value for both investors and entrepreneurs.”
The fund would promote black economic empowerment in accordance to the provisions of the new Mineral Development Law, as well as the Mining Industry Charter.
”The Fund will primarily invest in the early stages of mine development; covering pre-feasibility stages, resource measurement, full feasibility, mine planning and designing, up to and including early production stages.”
The NAMF would be managed by a fund management company, Decorum Capital Partners and has several trustees, including Goldfields Limited and Absa Corporate and Merchant Bank. – Sapa