NEWS
Copper   Precious Metals  

Private capital favours investing in copper over gold for first time

Gold projects are no longer the favorite destination of private capital raised for investment in the mining sector as optimism about electric vehicle demand steer funds into battery metals.

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

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:

"With the continued recovery in the sector, 2018 is expected to see an ongoing deployment of capital by the mining private equity funds," Alexander Keepin wrote in the report. "Battery metals, copper and gold are expected to continue to be the most popular commodities."

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.

Comments:

Leave a Comment:

   
   
   
 

Barrick mulls selling Zambia copper mine over higher taxes

Gold giant Barrick (TSX:ABX)(NYSE:GOLD) said Monday that while it continues to engage with the Zambian government and community stakeholders about a mutually-beneficial way forward for its Lumwana copper mine, it would consider selling the operation given the “challenging conditions” it’s facing.
 

Slower growth weighs on base metals but constructive for gold, CIBC says

The negative effects of trade disputes on global growth this year will push down demand for base metals and steel-making commodities, while the economic uncertainty will drive gold prices higher, CIBC says.
 

Copper price falls after Chinese economic growth hits 28-year low

The copper price came under renewed pressure on Monday after headline figures showed a slowdown in the Chinese economy to annual rates of growth not seen in nearly three decades.
 

Turquoise Hill reports fourth quarter 2018 production for Oyu Tolgoi, 2019 guidance

Oyu Tolgoi is expected to produce 125,000 to 155,000 tonnes of copper and 180,000 to 220,000 ounces of gold in concentrates this year, Turquoise Hill Resources (TSX: TRQ; NYSE: TRQ) reports.
 

Carube Copper finds high grades in Jamaica

Following a mapping and prospecting campaign in conjunction with a grid-based soil sampling program and follow-up rock channel sampling, Carube Copper (TSXV: CUC) reported the discovery of high-grade copper-silver mineralization at its Main Ridge Project in Jamaica.
 

China’s slowdown is miners' single biggest fear this year — report

A worsening of the ongoing economic slowdown in China, consumer of about half the world’s commodities, is the single biggest challenge mining and metals companies face this year, a new survey of senior executives shows.
Upcoming Events
Publications
 Mines & Metals

Mine & Business Today

 Scrap & Recycling

Ahangan

Our partners