Mar 26 2009
|more articles from|
Middle East funds, Japanese, Koreans seeking mining and gold investment
"This is the time to do that because asset values are low," Paul Knight, managing director and joint global head of metals and mining with UBS, said today. "The Koreans are looking at acquisitions, and the Japanese to some extent."
China last month agreed to invest US$22 billion in commodity producers including Rio Tinto Group as indebted companies seek funds after the global recession and credit crunch spurred a collapse in metal prices and lending. Sovereign wealth funds may be diversifying after losing more than US$60 billion since the onset of the credit crisis after investing in financial stocks.
There is a "significant increase" in interest in the mining industry from Middle Eastern investors, Ziad Kawash, Managing Director of Equity-i , said today in Singapore. "There are pools of capital in the region which do look at mining opportunities but they have to carry a strategic value back to the home country."
Equity-i has advised on private equity deals over US$2 billion, according to its website. It has US$500 million under management, he said.
Temasek Holdings, the Singapore state-owned fund, this week said it will consider "opportunistic" mining investments to tap growth in emerging economies.
Kawash and Knight were attending a mining conference.
Fortescue Metals Group, Australia's third-largest iron ore exporter, said this week that investment talks are still continuing with China Investment Corp, the nation's US$200 billion sovereign wealth fund.
Wealth funds aren't "operators of mines, they tend to want an operator with them," UBS's Knight said in an interview. "But it is too early to tell exactly what their modus operandi is going to be. They are, as with private equity firms, going up the learning curve dealing with a cyclical industry."
Chinese companies are also considering investing in Canada and Latin American countries including Peru and Chile because of the better infrastructure and low political risks, Knight said.
African countries like Congo, which has good copper resources, may be attractive over the "mid-term" he said.
The Reuters/Jefferies CRB Index, which tracks 19 raw materials, dropped 36% last year in the biggest annual decline since at least 1957.
- Ends -
For more information,please contact:
P.O. Box 213652
Al Attar Tower, Office 1702
Sheikh Zayed Road
© Press Release 2009
© Copyright Zawya. All Rights Reserved.
More in Financial Services
- Beetles, housefly larvae open new frontier in animal feed sector
- N.Korean leader Kim used luxury yacht to tour coast -website
- NASA wants backyard astronomers to help track asteroids
- CORRECTED-Kimberly-Clark moves to ease Venezuelan toilet paper shortage
- CORRECTED-U.S. patent case climaxes with win for Canadian vibrator maker
- There's More