Mining Capital Raising
2012 saw a decline in overall capital raised for mining companies with $249 billion being raised as compared to $340 billion in 2011. The decline in capital raised reflects changing investment appetite, scaling back of capital outlay by large diversified mining companies and a fundamental shift in funding sources from traditional capital markets to alternative investors and new funding sources.
Capital raising by asset class – proceeds $m (2007-2012)
The mining IPO market was down 40% by volume in 2012 with an 81% decline in proceeds (their lowest levels since 2007 and 2009 respectively).Widespread risk aversion resulted in a 48% decline in secondary equity offering proceeds to $26 billion and a reduction in average proceeds raised by junior companies to just $4 million per company.2012 witnessed a significant fall in loan proceeds to mining companies with a reduction to $106 billion (from $187 billion in 2011) as banks continued to reduce their risk exposure in order to manage reserve capital requirements. Over 50% of the loans closed in 2012 were adjustments to existing facilities. Mining and metals companies raised bond proceeds of $113 billion in 2012, using bond markets as an alternative to bank debt. Bond issues by the top six diversified miners were $42 billion.
Value of deals by target region (2007-2012)
|Market Share (by proceeds $m)||2007||2008||2009||2010||2011||2012||Y-o-Y