[miningmx.com] – AFRICAN Minerals, Exploration and Development (AMED) was seeking brownfields investments, or even platinum “outside the politics of South Africa”, but believed there were currently very few opportunities.
Speaking at the Joburg Indaba conference last week, David Twist, a principle of AMED, said the public markets were “disillusioned” with the mining market, but that the private equity firm hadn’t struggled to raise capital for its second fund.
AMED placed $150m in eleven investments in its first fund, according to information published on its website. It had been able to raise $300m for a second.
“I’ve got no doubt we will place fund two as effectively as fund one. The sweet spot would be brownfields projects,” said Twist.
“If we could find a first class platinum asset outside of the politics of South Africa, that would be attractive and we could raise alot of money for that,” he said. “We are always interested in the big minerals such as potash, copper … and gold,” he added.
“Right now we are seeing very few opportunities. We are looking at projects every day, but finding very little. So far we have invested in two projects from the new fund,” said Twist who added capital for the second fund was raised without a struggle.
Paul Smith, COO of Wesizwe Platinum, said the South African platinum market was in a similar position to the country’s gold sector in the Nineties.
“The South African platinum sector is due for major restructure,” said Smith who added the sector could benefit from a company like Harmony Gold in the gold sector which was able to cut costs and run more efficiently than its rivals.
Restructuring in the sector should be “horizontal” in that some companies would specialise in processing and refining while others would stick to underground mining.
“There is value [in the sector] very similar to the birth of Harmony where poorer assets will be regenerated. There is a lot of overheads that can disappear, and then you would have very sustainable business.
“Restructuring in the platinum sector as a whole is a good five years overdue,” Smith added.
