Innovation in the Mining Sector
The mining sector in Africa plays a pivotal role in the global mining industry , presenting significant opportunities and challenges for the project finance market . The sector is increasingly adopting renewable energy solutions through innovative offtake agreements with Independent Power Producers ( IPPs ).
Hybrid systems — combining solar , wind , and battery storage — are gaining significant traction as mining companies strive to establish reliable green energy supplies that align with their ESG objectives .
However , challenges persist , particularly with local legislation that often favours national utility monopolies , creating barriers to independent energy development . Navigating these regulatory hurdles requires careful assessment and strategic planning during the early stages of project development .
Despite the challenges , the potential for growth in the mining sector remains strong , particularly in Africa which is rich in mineral resources , meaning that the region will play a strategic role in the global energy transition due to its reserves of critical minerals like lithium , cobalt , and graphite which are all key components in renewable energy technologies .
We continue to see activity in traditional project financings of mines , as well as royalty and streaming agreements which are potentially easier pools of capital to access for junior mining companies . Environmental , social and governance considerations remain central to any financing arrangements . Integrating renewable energy into mining operations potentially opens the door ESG focused debt , such as green loans .
Recent Notable Matters
• Hellas Gold Single Member , S . A . — € 680 million project financing facility for a subsidiary of Eldorado Gold Corporation for the development of the Skouries gold and copper mine in Northern Greece
• Ecora Resources — acquisition of 0.85 percent gross revenue royalty over the Phalaborwa Rare Earths Project in South Africa and the acquisition of shares in Rainbow Rare Earths Ltd , the majority owner of the Project
• ASCOM Precious Metals Mining — advising on the sale of its interests in the Kurmuk gold mine in Ethiopia to Allied Gold ET 2 Corp , a wholly-owned subsidiary of Allied Gold Corporation for a combination of shares , cash and deferred consideration
• Ecora Resources — $ 50.25 million acquisition of a 1.525 percent net smelter return royalty from Mantos Copper in relation to the Mantos Blancos copper mine in Chile
• Ecora Resources — $ 20 million royalty and financing arrangement with Incoa Performance Minerals LLC in relation to the development of its calcium carbonate mine in the Dominican Republic and processing plant in Alabama
• Ecora Resources — equity investment in Brazilian Nickel , together with its $ 70 million gross revenue royalty and intercreditor arrangements with potential project finance lenders , in respect of the Piaui nickel project in Brazil
The Year Ahead
As the demand for sustainable operations increases and regulatory frameworks evolve , we anticipate significant opportunities for IPPs and mining companies to collaborate and shape the future of energy in Africa . bracewell . com