SEEKING OPPORTUNITIES Denham Capital is aiming to invest in base metals, as they are sustainable in the long term
Convinced that copper was positively poised for future growth, energy-focused global private-equity firm Denham Capital Management was aiming to invest in new copper projects in Africa, said company director Caroline Donally, who spoke to Mining Weekly on the sidelines at this year’s Investing in African Mining Indaba.
She said that the company was placing greater emphasis on resources, such as base metals, which were used in infrastructural development projects and for product applications, as base metals have “long-term sustainability”.
However, Donally said the company was not specifically targeting Zambia, which is the largest copper producer in Africa, but was aiming to invest in lesser-developed copper-producing countries such as the Democratic Republic of Congo (DRC).
“Part of our strategy is to invest in small- to medium-sized assets that are close to production. While we are not saying that Zambia – as an investment destination – is completely off our radar, these are the types of opportunities we would consider there,” she clarified.
Donally explained that, as a growth-equity firm, Denham Capital invests in the early stages of a project and assists in developing it to a certain point, such as production readiness, after which it sells the project to larger mining investment companies for further development.
African Footprint
Denham Capital is involved in financing several African projects and has been doing so since late 2011.
“We currently have several assets in the DRC, which has several key resources, such as copper, gold, tin and manganese,” noted Donally.
She said that the projects in the DRC were at different stages of development, as some were in the early exploration stages, while others had reached the prefeasibility stage.
“By the end of this year, we would like to have a better understanding of the size and grade of each project’s resource, and we would like to establish the viability of continuing investment in each project.
“We also hope to complete feasibility studies on the more advanced projects and want to start work on predevelopment agreements,” she stated.
Further, Donally added that Denham Capital was interested in investing in South Africa’s coal sector, owing to the commodity’s positive long-term growth prospects and its relatively stable labour sector.
“We are also interested in exploring investment opportunities in South Africa’s niche metals market, including manganese,” she added.
“As a private-equity firm, we attended the Mining Indaba for several reasons: to see what new investment opportunities there are in Africa, to reassess the projects in which the company is currently involved and to discuss the state of the industry with other industry players,” she concluded.