Tables

Table 1: Rankings of major mining groups

Rankings of major mining groups (in US$) for early 2010

• A total of US$91.2 billion was spent by investors on equity (obtaining shares) in mining companies during 2009

• There were only seventy IPOs (Initial Public Offerings of shares) last year, raising a mere US$3 billion - compared with 118 IPOs in 2008 that raised four times as much (US$12. 4 billion), and over twice the number of such offerings in 2007 (280), which raised US$21.4 billion

• Nonetheless, “secondary” share and rights offerings (those made once a company has “floated”), raised US$71.8 billion in 2009 (compared with US$48.8 billion in 2008); while the purchase of “follow up” equity itself rose slightly to US$76.8 billion

On January 12 2010, Barry Sergeant of Mineweb listed the Top 100 mining companies, according to their market capitalisation, along with an indication of the change in their share price over the previous 12 months. All of them (with the exception of two Russian enterprises) had lost value during that period – two of them by more than a quarter.

WORLD'S TOP 100 MINING STOCKS

* 12-month

[Source: market data; table compiled by Barry Sergeant]

Rankings of major mining groups (in US$) for early 2008

Below are rankings for the five major diversified mining groups in terms of market cap, and revenues as of early 2008

Market capitalisation (in $US on 5 February 2008)

Revenues (in $US for 6 months to end June 2007)

[Sources: Reuters 3000 Xstrata, for market capitalisation; Reuters Knowledge, for revenues, 6 February 2008]

Table 2: Value of mining M&A’s

Value of mining M&A’s in 2008-2009

• 919 Mining Mergers and Acquisitions took place in 2008, with a combined value of US$126.9 billion.
• In 2009, the number of M&A deals slightly increased (to 1,047) but their value plummeted by more than 50% - to just US$60 billion
• Only 2% of bank loans (see below) were used in 2009 to fund acquisitions
• China accounted for US$16.1 billion (27%) of all such transactions in 2009
• China completed 369 deals between 1999 and 2009; nearly 80% of which ocurred in 2008-2009

Value of Top mining M&A’s (above US$ 3 billion) 2001-2007 (in $US)

NB: According to Thomson Financial, in 2000 there were 505 M&As between mining companies; the figure shot up to 1,580 in 2006 (comprising a book value of US$ 134, 735 million).

PriceWaterhouseCoopers reported 1,732 mining M&As in 2007, with a combined worth of US$158.9 billion.

[Sources: “Mining Deals: 2007 Annual Review”, PriceWaterhouseCoopers, March 2008; “Financing Global Mining”; Mineweb, 3 July 2006]

Table 3: Largest lenders to mining

2008-2009

• More than half of mining-related bank loans in 2009 (58%) were used to refinance existing debt
• In 2009, both the amount and the size of debt/loan finance transactions diminished markedly over what they had been through 2008 (when they reached a record leve).
• Last year, total debt proceeds fell to US$62.4 billion (2008: US$172 billion). The average value of each loan was only US$351 million, compared with US$641 million each in 2008, and US$1.3 billion each the year before.

In Financial Year 2007 the total in direct loans, for all purposes, issued by the World Bank/IFC came to US$ 8 billion, plus another US$4 billion “mobilised.” [see: http://www.ifc.org/ifcext/annualreport.nsf/AttachmentsByTitle/AR2007_ExeSum/$FILE/AR2007_ExeSum.pdf])

In contrast, between 2000 and 2006, private direct loans to, and debt financing of, the minerals industry involved at least fifty three banks (both private and state-owned,) insurers and other financial institutions, each providing from US$ 5 million to US$ 5,746 million in any one year (lower-priced loans or debt-financing not included.)

This resulted in around US$ 178 billion (US$ 177, 864 million) being disbursed to mining companies during that period.

The amount of money “arranged” for the minerals industry – both in projects and for general corporate purposes - has been significantly more, coming to a figure not far short of US$250 billion (US$ 248,170.8 million) from the start of the new millennium until 2006. Known as a syndication, where more than one bank or “underwriter” (assurer) is involved (and headed by a “lead arranger”), this classification includes both loans (see Tables 3 and 4) and bond issues (Table 5).

2000-2006

Largest lenders to mining, 2000 - 2006 (in US$ million)

[Figures aggregated by author from “Financing Global Mining”]

Table 4: Top Mining Loan deals (above $US 3 billion)

2000-2006

(Lenders are listed in order of priority for each transaction)

[Source: “Financing Global Mining”]

Table 5: Global Mining Bond issues

2008-2009

• Ninety seven convertible bond issues were made in 2009, raising US$ 14.4 billion, in contrast to US$ 12.2 billion in 2008 (on 78 issues) and a similar amount the previous year (on 81 issues)
• New corporate bond issues in 2009 numbered 150, raising US $61 billion – a 60% increase on 2008.
• Chinese bonds accounted for 32% of these issues.

The value of bonds, issued on behalf of mining companies in 2006 alone, had outstripped that of all project funding granted during the previous five years (Table 5).

Traditionally, mining-related bond issues have been made in the US, Canada and the UK. But the largest single issue of all during this year was made in Brazil (for CVRD. At US$7, 278 billion, this was nearly double all mining bonds issued the previous year

The lead bond issuers for the mining sector were: JP Morgan, Citigroup, Morgan Stanley and Merrill Lynch.

Global Mining Bond issues, 2000-2006 (in US$)

[Source: “Financing Global Mining”]

Table 6: Mine Project Finance

2008-2009

• Ten mining project deals achieved “financial closure” in 2009, compared with 16 the previous year.
• Only one such project (Antofagasta’s Minera Esperanza in Chile) was valued at more than a billion dollars.
• Total project finance for last year came to US$5.4 billion – in 2008 it was US$7.7 billion, the biggest chunk of which landed in Latin America

“Project finance remains a key”

The amount of money put directly into mining projects per se, appears insignificant, compared to that provided through corporate loans/debt finance, or bond issues. (See above).

Nonetheless, just over 9 billion dollars (see below) signifies more than a widower’s mite. More strikingly, over a third of this project finance was disbursed in only one year, 2006. As one commentator put it: “Project finance remains a key.” [Quoted in “Financing Global Mining”, op cit.] That is especially true once a company has completed its economic and other due diligence studies (which may or may not include social and environmental assessments), then seeks to present a “bankable feasibility study” to potential lenders. For junior companies – especially those fresh to “the market” – this is a critical stage, at which they may well stand or fall.

Mine Project Finance between 2000 and 2006 (in US$)

[Figures aggregated from: “Financing Global Mining”.]