The International Finance Corporation (IFC) has announced its intention to invest $300-million in mining com- panies operating in Africa over the next three years, at the Mining Indaba, in Cape Town.

IFC senior investment officer for mining infrastructure and natural resources in Africa and Latin America Christian Mulamula said that the corporation would be targeting a mix of equity and debt investments over the next three years.

The equity investments would focus predominantly on junior mining com- panies seeking finance for exploration projects and feasibility studies.

The debt investments would focus on African mining projects at developmental stage.

“IFC is looking to support midtier mining companies by participating in project and corporate financing partnerships that will support mining development and expan- sion,” Mulamula told Mining Weekly on the sidelines of the Mining Indaba.

“IFC will also continue to work with mining majors to develop large projects with the potential to transform regional economies.”

The intention of this investment was to support growth in the African mining sector, which was a major source of employment, revenue and skills transfer for countries across the continent.

It was expected that investments would be made into projects based in less developed and postconflict African countries in order to stimulate economic development in those areas.

IFC senior manager for infrastructure and natural resources in Africa and Latin America Andrew Gunther said that mining was a critically important yet challenging sector and the IFC had a role to play in supporting responsible companies that would bring jobs, related infrastructure and government revenues to Africa.

Mulamula continued that the IFC did not have a commodity bias and would invest in projects across the commodity portfolio.

It was likely that investments over the next three years would reflect the existing portfolio, which had a strong focus on gold-mining projects.

The IFC would continue to have a strong focus on gold exploration and projects over the next three years although it was keen to invest in other high-demand commo- dities such as iron-ore and bauxite, said Mulamula.

He noted that the earmarking of $300- million for mining investment was reflective of the IFC’s optimism in the African mining sector.

“There are a lot of attractive investment opportunities in Africa.”

Last year, the IFC’s portfolio of mining clients helped spur economic growth throughout the developing world by providing over 50 000 jobs, paying over $1- billion in government revenues, spending over $3-billion on local goods and services, and investing over $150-million in community development programmes.

The IFC’s global mining portfolio spanned 37 countries, 17 of which were in Africa, totalling more than $400-million.
Its recent mining investments in Africa included Gryphon Minerals and Volta Resources, in Burkina Faso; Helio Resource and Petra Diamonds, in Tanzania; Nyota Minerals, in Ethiopia; and Tsodilo Resources, in Botswana.

The IFC also recently invested in the Africa-focused New Africa Mining Fund II to help provide funding for junior mining companies.

Apart from the boost in investment, the IFC would continue to offer mining clients in developing countries a broad range of financial and advisory services throughout the mining life cycle.

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