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Eric Rasmussen Director Natural Resources PUBLIC Mining For Generations European Mining Academy 18 June, Belgrade
Eric Rasmussen
Director Natural Resources
PUBLIC
Mining For Generations
European Mining Academy
18 June, Belgrade
Russia – not currently investing
KazakhstanMongolia
—Kyrgyz Republic
—Tajikistan
—Moldova
—Jordan
Azerbaijan
—Morocco
Belarus
Ukraine
—Romania—Serbia
—Kosovo Georgia—
Armenia—
Tunisia—
Croatia—Bosnia and Herzegovina—
Montenegro—
Albania—
FYR Macedonia
—Turkmenistan
—Bulgaria
Estonia—
Latvia—
Lithuania—
Poland
Slovenia—
Czech Republic—
graduated —Slovakia
—Hungary
Uzbekistan—
Egypt—
GreeceCyprus
Turkey
2
Where we invest
Central
Eastern Europe
SEMED Western Balkans Turkey
Armenia, Azerbaijan, Belarus,
Georgia, Moldova, Ukraine
Central Asia
(incl. Mongolia)
Cyprus, Greece
West Bank
and Gaza
Lebanon
—Lebanon
West Bank & Gaza—
PUBLIC
The EBRD mining strategy is found here: https://www.ebrd.com/mining%20operations%20policy.pdf
EBRD strengths and objectives
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Key strengths Objectives
Long-term perspective
Commercialbasis
Regionalintegration
Policydialogue
Work with governments and
shareholders
25 yearsexperience
Local presencein 36 countries
Structuring expertise
Catalyst to mobilise finance forboth private and public sector clients
Invest both in the private and state
sectors
Commercialbasis
Improve people's lives
Private sector development
InnovateForeign direct
investment
PUBLIC
Cumulative Business Volume (excluding Guarantees)EBRD Promotes
transition to market
economies whilst
fostering sustainable
development and
inclusive growth.
70 countries and two EU bodies.
EUR >130bn invested since 1991
>5,200projects since 1991
EUR 9.5bn across
395 projects, 73%
private sector and 91%
debt in 2018.
4
0
15
30
45
60
75
90
105
120
135
0
2
4
6
8
10
12
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
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20
14
20
15
20
16
20
17
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18
Ne
t cu
mu
lativ
e b
usin
ess v
olu
me
(EU
R b
n)
An
nu
al b
usin
ess v
olu
me
o
r A
BV
(EU
R b
n)
Debt (LHS) Equity (LHS) Net Cumulative ABV (RHS)
Shareholding Structure
EBRD non-
EU, 7%
Japan, 9%
USA, 10%
Others
11%
EU 28
countries +
EIB + EC
63%
Introduction to EBRD EBRD Natural Resources Track Record Working Together
Introduction to EBRD
PUBLIC
Country Group Portfolio Distribution
S.E.
Mediterranean
21%
S. E. Europe
18%
Eastern Europe & Coucasus
16%
Central Europe
& Baltics
13%
Central Asia
11%
Turkey
11%
Cyprus & Greece
10%
5
EBRD Natural Resources
A key investor in the mining sector
Mining Investment Volume (signed) Mining Portfolio by Instrument, YE 2018
Mining Portfolio by Commodity* Mining Portfolio by Region, YE 2018
Introduction to EBRD EBRD Natural Resources Track Record Working Together
PUBLIC
75 equity and debt projects
EUR 9.4bn investment since 1991
EUR 4.0bn debt and equity portfolio
30+ bankers in London, Istanbul, Cairo,
Kiev, Astana, Almaty,
Ulaanbaatar. In-house
engineering expertise.
Minerals Base (Cu, Zn, Fe, Cr)
Precious (Au, Ag, PGM)
Industrial minerals
Metallurgical coal
Thermal coal and uranium
are excluded (except HS&E)
* as of YE2018
209
56
10
583
254296
165
0
100
200
300
400
500
600
700
2012 2013 2014 2015 2016 2017 2018
EU
R m
illio
n
Central Asia
49%
Mongolia
31%
Turkey
6%
South Eastern
Europe
5%
Eastern Europe
and Caucasus
4%
SEMED
4%Russia
1%
599[12]
392[10]
146[1] 78
[2] 44[3]
32[2]
-
100
200
300
400
500
600
700
800
Copper &
Gold
Concentrate
Gold & Silver Zinc Chrome Coal Iron Ore
EU
R m
illio
ns
[No
. o
f o
pe
rati
on
s]
Debt, 93%
Equity, 7%
Equity
Exploration /
Early StagesDevelopment / Growth Mature / Expansion
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EBRD Natural Resources
Financing across the value chain
Debt
PUBLIC
All stagesExploration
Mine development
Reclamation/clean-up
Service providers (drilling)
All products
Project Finance
Corporate Debt & Bonds
Mezzanine
Convertible debt
Listed equity (IPO, SPO)
Private equity (structured)
Impact
Green: waste/water efficiency
Well governed: E&S, EITI, ICMC
Inclusive: youth/gender initiatives
Competitive: new technologies
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EBRD Natural Resources
Recent deals – Mining and Services
Altai-Polymetali
2015, Kazakhstan
USD 100 million
Senior loan
Copper-Gold mine
development
Oksut Madencilik
2016, Turkey
USD 75 million
Senior Loan
Gold mine
development
Dundee Precious Metals
2016, Bulgaria
CAD 43 million
Equity investment
Gold mine
development
PUBLIC
Centerra Gold
2016, Kyrgyzstan/Mongolia
USD 150 million
Revolver debt facility
Gold mines expansion and
development
Lydian International
2016, Armenia
CAD 11.4 million
Equity
Gold mine
development
Euromax Resources
2016, Rep of Macedonia
USD 5 million
Convertible Loan
Copper-gold mine
exploration & development
Oyu Tolgoil
2015, Mongolia
USD 1.2 billion
Senior A/B loan
Copper-gold mine
expansion
Compagnie Miniere
de Toussit
2016, Morocco
EUR 28 million
Senior Loan
Lead-zinc-silver mine
upgrade
JsC ShalkiyaZinc Ltd.
2017, Kazakhstan
EUR 350 million
Senior A/B Loan
Lead-zinc- mine
expansion
Polymetal International Plc
Baykirchik Mining Venture
2018, Kazakhstan
EUR 140 million
Senior Loan
Gold mine
development
Kincora Copper
2017, Mongolia
CAD 1.4 million
Equity investment
Drilling and exploration
programme
Tumad Madencilik A.S.
2017, Turkey
USD 40 million
Senior loan
Gold mines development
Mining
Junior & major miners
Services (drilling)
Minerals
Precious & Base Metals
Industrial Minerals
TC Assistance
Energy/Resource audit
EITI Accession
Gender/Inclusion
Corporate Governance
Yildirim – Voskhod Chrome
2015, Kazakhstan
USD 260 million
Senior A/B loan
Chrome mine
restructuring & expansion
Yildirim – Voskhod Chrome
2018, Kazakhstan
EUR 26 million
Senior Loan
Chrome mine
restructuring & expansion
Maya Gold & Silver
2015, Morocco
USD 6 million
Senior loan
Silver mine
modernisation
Key EBRD mining countries
13 June, 2019 PUBLIC
Countries with high risk reliance
on mining
Countries with long-term mining
business potential
Countries with low to medium
mining business potential
Countries with leading
international mining companies
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13 June, 2019 PUBLIC 9
Investment
Policy engagement
Government
willingnessEBRD value added
The country diagnostics look at the mining sector’s
role in a country’s economy. The tool will also focus
on the risk and potential relative to ore endowment,
state budget dependency, size of domestic value
chain, permit regime, EITI principles and EHSS.
Strategic mining sector challenges
Mining countries
Countries with high
exposure to unviable
mining endowment
Recommendations for Country
Strategies
Long-term viable and
important mining
countries
Country diagnostics focuses are on (i) countries where mining is important today but at risk due to lack
of new investment/exploration, and (ii) countries with high mining potential.
EBRD approach to mining countries
Country diagnostics
Technical cooperation
and fee-based advisory
Mining investors in countries with weak legal and
institutional frameworks face additional risks
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Ruling elite’ attitude
to governance
Political elite’s attitude to governance (…rule of or by law)
Dialogue with investors as well as NGOs and CSOs
Legal and
institutional
framework
Predictability of the legal and institutional framework
Attitude of the Government
- FDI treatment and protection of investors
- Expropriation and nationalization
- International arbitration and dispute resolution
Some typical
investor problems
- Access to resource tenders
- Bureaucracy and integrity in permit procedures
- Tax procedures and inspections
- Capacity of local service markets (SMEs)
- Behavior of competitors
- Transfer of technology and payments
- Intellectual property rights
10PUBLIC
Investment climates need long-term confidence
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Net cash
Production revenue
+
-
OPEXCapex
3. Feasibility Study/
Permits
1. Discovery Royalties and taxes
DEVELOPMENT PHASE
2. Pre-Feasibility Study
Abandonment
costs
PRE-DEVELOPMENT
4. Construction
DiscoveryAppraisal andDevelopment
Production Abandonment
GeologicalDesign/Engineering
Construction/ Completion
Operational, Supply, Offtake, Commodity, Infrastructure, Repayment, E&S
Environmental
Exploration licence
Production licence
Environmental permit
Expropriation, Currency convertibility, Tax changes (CT, royalties etc), VAT and Export duty exposure, fines
Project cycle
Main risks
Sources of
political risk
11PUBLIC
EBRD has a strong focus on modernisation &
innovation in the mining sector
• Realise the potential for environmental
regeneration. Turn idle brownfield land
into economic viable land due to lower
opex to realise value
• Enhance the scope of traded materials
in response to evolving market demand
PUBLIC
• Enhance the image of mining as a safe and responsible activity
• Provide opportunities for economic restructuring while partnering
with other industries (farming, downstream processing, water)
• Better “Resource Efficiency” is critical to company
performance and the future of mining - and the
future of several EBRD countries depend
significantly on viable mining
How do you become a preferred supplier though
innovation focused on resource efficiency?
PUBLIC
Eric Rasmussen
Director
Natural Resources
Tel: +44 207 338 8615
Email: [email protected]
EBRD, One Exchange Square
London, EC2A 2JN
United Kingdom
www.ebrd.com
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Contact
PUBLIC
