Dramatic decline in metals and mining financing

While the metals and mining sector has been struggling with limited capital, fundraising in the natural resources industry has been burgeoning, according to a new report.

The Preqin Special report on natural resources showed fundraising for metals and mining peaked in 2012 with an aggregate capital of $4.6 billion.

In sharp contrast, the 2015 year to date capital raised was only $400 million.

The industry’s decline has been substantial, with an 82 per cent drop from last year’s aggregate capital of $2.3 billion.

Conversely, natural resources funding was expected to close on a record year with financing forecasted to reach the 2013 record of $61 billion.

Year to date, it has already surpassed the $52 billion raised in 2014.

Preqin said investment in the metal and mining sector was directly related to concerns of the market conditions.

Prequin attributed metals and mining’s downturn to China’s economic slowdown and soft market sentiment which has resulted in low commodity prices.

However, there is potential growth in the metals and mining funds industry with eleven funds targeting $3.2 billion in aggregate capital.

Some funds may also be extending the period before holding the final close to attract more investors.

Preqin has also indicated that 38 per cent of investors on Natural Resources Online have indicated plans, or are considering investment in metals and mining over the next twelve months.

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