CREDIT LIFELINE American Trade & Finance Company is well placed to provide finance for mines to secure high-quality US products and services
With mines struggling to raise capital to buy capital equipment and acquire services for their projects, international commercial lender American Trade & Finance Company (Atrafin) is offering miners the opportunity to buy high-quality US solutions by providing them with the required finance.
The company has a master credit guarantee agreement with federal government export credit agency the Export-Import Bank of the US, or Ex-Im Bank, to fund the export of US goods and services to countries worldwide.
Atrafin South Africa CEO Harry Kaplan informs Mining Weekly that a number of international banks are making less funding available and, in some cases, completely withdrawing funding for mining projects, owing to the challenging economic climate and the continuing slump in most commodity prices.
Therefore, he says Atrafin is well placed to provide finance to assist companies in developing and improving the operational efficiencies of their mining projects.
“We also provide companies with supplementary credit that can be used in addition to existing credit lines to secure US equipment and services,” Kaplan adds.
Atrafin concluded a deal in April to provide $10.7-million in financing for a manganese mine, in Gabon, for the procurement of locomotives to transport ore to the port.
The company has also provided funding for other projects throughout Africa, including Zambia, Kenya and Nigeria, and helps finance US products and services to other sectors in South Africa, including the steel, agriculture, construction and medical industries.
Further, Kaplan points out that, provided there is a significant US element in the transaction, the company can also provide cofinancing with other European financial institutions, such as Hermes Bank and Servizi Assicurativi del Commercio Estero (commonly known as SACE).
He highlights that the company offers long-term, flexible funding models to suit clients’ requirements and, while Atrafin conducts most of its transactions in US dollars, it can – in certain circumstances – also conduct them in rands.
Atrafin CFO Moshe Erster notes that the company can also fund up to 30% of local project costs, including the ability to meet local content requirements, which are being increasingly stipulated by many countries.
He states that the company can, for example, cover value-added tax, customs duties and other project-related commissioning costs.
Moreover, Erster says, Atrafin can also finance the procurement of second-hand US equipment. “There is a growing demand in Africa for the use of second-hand equipment, owing to cash constraints and mine managers preferring to use older, less complex machinery which they are familiar with,” he explains.
An increasing number of US companies have good-quality, second-hand equipment to sell, owing to the closure of several mines, Kaplan concludes.