Australian project financing falls back

AUSTRALIAN projects have attracted a significantly smaller share of the global funding pie so far in 2015 compared with the previous few years, according to new statistics from SNL Metals & Mining.
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Jack McGinn

According to SNL’s Mining Financing by Region analysis, which has tracked capital raisings by mining and exploration companies since the beginning of 2013, Australian projects have attracted the third most financing over the assessed period, with 15% of the global share of $US82.9 billion ($A106.9 billion).

However the nation is off to a poor start in 2015, with its projects attracting just 5% of global sector funding to the end of March compared with 33% in Canada, and 26% in Latin America.

While statistics may seem dire, the business intelligence service said there was potential for financings in Australia to lift as the year progresses.

“Although mining-associated fundraising has been largely stagnant in the first quarter, there may be more movement as the year unfolds,” the report said.

The study assessed projects across all mineable commodities, including precious and base metals, iron ore, uranium, coal, potash, and specialty metals such as rare earth elements, graphite and lithium.

Asian and the Middle Eastern projects received the greatest proportion of funding over the wider period at 20% or $16.9 billion, followed by Latin America, which sat second at 17% or $14.1 billion.

Projects in Australia have attracted 15% or $12.8 billion in funding since the beginning of 2013, ahead of Canada at 14% and the United States at 12%.

Projects in Europe, which included Russia and central Asia, attracted 10% of global funding, while Africa and Pacific/southeast Asia rounded out the results with 8% and 3% respectively.

Of the $17 million destined for Asia and the Middle East, almost two thirds came from countries in the region, which were primarily headquartered in China.

Interestingly, while Canadian companies generated the most funding over the period at $22.2 million, less than one third was allocated to domestic projects.

The Canadian experience was in stark contrast with that of African and Latin American companies, where 82% and 96% of the respective funding provided was spent domestically.

Domestic spending increased year-on year in Australia, with Australian companies raising $3.8 billion in 2013 and allocating 53% of it domestically, before targeting 73% of the $6 billion raised in 2014 on local projects.

It was a similar story in Canada, where domestically allocated capital raising jumped from 19% of $8 billion in 2013 to 35% of $11.6 billion in 2014.

Majors raised 43% of the $82.2 billion secured over the full period, with 55% of Latin America’s total funding coming from major companies along with 44% of the total targeting Asia.

January 2015 proved to be the worst month for project funding since the start of 2013. Less than $500 million was raised across the world that month, while no other month within the assessed period brought in less than $1 million.