African mining draws Australian interest

West Africa’s mining industry is receiving a US$30mn investment from two Australian institutions.

Australia’s export credit agency EFIC and finance company Caterpillar Financial Australia are providing US$15mn each in a four-year loan facility to African Underground Mining Services (AUMS) for its contract underground mining operations in Ghana and Mali.

AUMS will use the funding to purchase equipment, some of which will be manufactured by Caterpillar in Tasmania, Australia.

Peter Field, executive director, origination and portfolio management at EFIC, comments on the problems businesses face finding financing for emerging market risk: “While a business proposition may be sound, the perception of risk in emerging markets often limits the availability of commercial finance.”

However, the EFIC decided to provide funding for the deal for a number of reasons, as Field goes on to explain: “This transaction is important in three ways; first, it enables AUMS to expand into an important, developing market. Second, it supports the export of expertise developed by AUMS’s shareholders and finally, it supports local employment in the manufacture of the capital goods required to undertake the contract.”

Neil Warburton, director at AUMS, adds: “EFIC’s financial support is critical to the achievement of our development ambitions.”
The mining company has entered into three mining contracts in Ghana; two at Red Back Mining’s Chirano gold mine and one at Newmont’s Ahafo gold mine, and one contract agreement in Mali at Randgold Resources’ Gara gold mine.