New mining fund committed to investing in Africa soon

coal NitinKirloskarThe fund invests in projects at early exploration stages across Africa. (Image source: NitinKirloskar/Flickr)The second New Africa Mining Fund (NAMF II) has said it will make its first investment in the African mining sector within three months

The US$120 million venture-capital fund invests in projects at early exploration stages in all commodities except uranium and diamonds.

The fund is studying investment prospects in gold, copper, iron-ore, coal, chrome and manganese mines.

NAMF II director Neil Gardyne told online news portal Mining Weekly, “We’re working on a number of deals and hope to conclude one of them within the next two to three months.”

The fund is planning to buy about 30 per cent to 40 per cent stake in early stage projects, take those projects up the value curve and then sell them to established mining companies.

NAMF I achieved a net internal rate of return (IRR) of 26 per cent and the second fund is expected to at least match that IRR.

NAMF II’s has been backed by the World Bank’s International Finance Corporation, the Development Bank of Southern Africa, the African Development Bank, the German DEG, the Dutch FMO, the Swiss Investment Fund for Emerging Markets and BHP Billiton South Africa.

NAMF I, which raised $85 million, had a commitment period of six years, followed by a harvesting period of four years, while NAMF II will have an eight-year life, with a five-year commitment period and a three-year harvesting period.

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