A study of global investment has shown Australian mining financing has held steady year on year, in spite of falling commodity prices.
However this is likely to see a downward trending movement as the year continues.
In SNL Metals latest report it found that while the 2013-2014 periods have been relatively consistent in total funds raised for mining and exploration globally, 2015 has so far been off to a troubled start.
According to the report, from January 2013 to December 2014 approximately US$89.92 billion was raised in financing worldwide for mining and exploration activities, with Australia making up around 15 per cent of this figure.
“The Asia/Middle East region received the most funding during the period at 20 per cent (US$16.92 billion), followed by Latin America with 17 per cent (US$14.10 billion) and Australia with 15 per cent (US$12.83 billion); the remainder was rounded out by Canada (14 per cent), the U.S. (12 per cent), Europe — including Russia and central Asia — (10 per cent), Africa ( per cent) and Pacific/Southeast Asia (3 per cent),” SNL stated in its report.
Surprisingly for Australia, more than half of this funding came from domestic sources as opposed to international investors.
“Australian companies raised US$3.77 billion and allocated 53 per cent of it domestically in 2013, and raised US$6.00 billion in 2014, targeting 73 per cent of it domestically.”
Year on year the levels remained relatively level in spite of the contraction of the industry and a slowdown in exploration.
Gold was the major commodity to see investment, following by copper.
When it came to global coal investments during the 2013-14 period, Australia made up more than half of all financings.
Yet while previous years have remained relatively stable, SNL have painted a poor picture for this year.
“Financings got off to a poor start in 2015. January was abysmal: With less than US$500 million raised (not including senior debt over US$1 billion), it was by far the worst month in the period for capital-raising.,” it stated.
“No other month between January 2013 and March 2015 had financings totalling less than US$1 billion. February and March returned to somewhat healthier totals, however, with well over US$1 billion raised in each month.”
Australia is also expected to see the most contraction in financing moving forward.
“Things appear most dire in Australia, which attracted 15 per cent of total financings in 2013-2014 but has fallen to only 5 per cent of 2015 financings to date.”
However the Australian market is looking to 2017 for a fresh injection of capital.