Absa Capital has recently completed its first private equity mining deal and plans to further capitalise on the commodities supercycle through investing in a Mining Fund for equity financing in the sector.
Andre Pieterse, Head of Equity Investments at Absa Capital one South Africa’s leading investment banks, says Absa Capital has recently completed a first for the investment bank through its financing of Wesizwe, a platinum exploration company, which plans to start extracting platinum group metals in 2009 on the Western Limb of the Bushveld Complex in the North West Province.
The deal was financed by Absa Capital through its strategic BEE associate Vunani in which Absa Capital has a 20% equity stake.
“The deal represents part of Absa Capital's strategy to increase its mining exposure, along with its BEE partners, in order to participate in the current metals and commodities supercycle,” says Pieterse.
“And it’s the beginning of a trend for us as we see great potential in the sector and expect a lot of value to be unlocked in the coming years.
“Previously Absa Capital took a 8.8% stake in the New Africa Mining Fund. Absa Capital and Decorum Capital Partners are working closely to launch the New Africa Mining Fund 11. This will focus on financing equity for mining companies.”
Pieterse says that there is a lot of investor interest in Platinum Group Metals at the moment as prices have reached historic highs and listed stock in the sector is enjoying great demand.
“We therefore expect further consolidation of assets in the industry.”
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About Absa Capital
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.