“Despite last year’s mining industry mergers and the slowing down of acquisitions, this year is still a great opportunity for China mining to further expand its overseas acquisitions,” the organisers say. Hosted by the Ministry of Land Resources, Tianjin Municipal Government and China Mining Association, the 15th CHINA MINING Conference and Exhibition 2013 will hold a Junior Mining & Exploration Investment Forum, organising members of overseas junior mining & exploration projects to meet with Chinese investors.
The organisers explain the rationale. “In the current international market, junior exploration companies with their high flexibility, rapid implementation of prospecting and financing capacity in risk capital markets, play an increasingly important role in exploration. In recent years, 80% of the important discoveries have been made by junior mineral exploration company. Exploration prospecting requires a great deal of capital investment, paradoxically, in the capital markets, these exploration companies often do not have steady operating results and a stable cashflow, it may even be the case that the only major property they own are their exploration rights. The problems of financing are for junior exploration companies the toughest issue in the international mining market development that they face.
“Exploration investment is unable to finance itself though traditional financing methods. Due to the high-risk of outbound mining investment, it is always difficult for overseas exploration activities to obtain commercial financing. In the context of the economic downturn, financial institutions want to get high-quality assets, so unless the company’s project is very competitive, financing proves very difficult to obtain. Currently the global mining capital markets have suffered severe losses, whether in Australia, Canada or South Africa the financing of mining enterprises is in deep difficulty. According to Wang Jiahua, Vice President of China Mining Association revealed in the National Prospecting event, the market value of overseas exploration companies and mining companies has been severely diminished, most companies has fallen by about 70%, some even fallen by 90 %.
“However, Chinese investors have showed a growing interest in overseas mining investments. At present, international metal prices are low; and in recent years, exploration findings mostly came from junior exploration companies, in the later stages of exploration, the needs of financing naturally become intense. Meanwhile, global exploration investment hit a record high, the number of newly discovered mines will increase, and financing needs will be more intense. It has now been ten years since the implementation of China’s ‘going out’ strategy, during this time China has accumulated rich experience in overseas mining investment, now is just a good time to ‘Go out'”.
This year’s CHINA MINING will open up a special area for overseas junior mining exploration companies. During the Forum, the participation of different types of financial institutions will also provide many new financing opportunities. Due to the downturn of the global economy and the capital markets, it has brought more opportunities for Chinese enterprises to invest overseas. National shortage of funds in the international capital markets and investment index decrease, every country is looking for new investment.
Institutions from different countries’ mining sectors, famous international mining experts from the capital markets and investment & financing institutions will discuss the issues of International Junior Mining & Exploration and Capital, Small and Medium Mining Enterprises Investment, dedicated to help international and domestic mining companies understand the policy, as well as the matching project and provide a strategy for dealing with mining competition, in addition, to promote the formation of an effective mechanism for docking between junior exploration enterprises and financing capital. At the forum, participants may have face-to-face, one-to-one opportunities to negotiate with the project parties and their competent authorities. Meanwhile participants have access to investment-related services and support to policy information.
On a global platform which offers Chinese investors and international junior exploration companies the chance for business ventures, this forum’s investment opportunities will become a stage for the mutual benefit of junior exploration services and investors. In the current global trend of economic and mining development, potential domestic and foreign mining companies involved in large-scale mining have responded positively towards this session of the China International Mining Conference. Despite the global economic downturn, although the mining sector M & A market is cooling off it’s not in total decline, China capital and the M & A market will become the backbone of support.