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IFC Provides Financing to Junior Mining Sector in South Africa


L. Joseph
Phone:  (202) 473-7700

Fax: (202) 974-4384

E-mail:  
ljoseph@ifc.org


Johannesburg, South Africa, August 29, 2002—The International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, is investing US$5 million in the New Africa Mining Fund, a private-equity fund whose goal is to foster mining activities and empowerment in South Africa and the rest of Africa—especially in the area of junior mining.  Junior mining involves small to medium sized projects whose capital needs cannot be satisfied through normal financing channels.

The fund will improve the availability of finance for entrepreneurs who have previously had limited access to capital.  This will promote growth of the junior mining sector, create jobs, encourage wider economic participation, and optimize the utilization of mineral resources.  The New Africa Mining Fund has a target market capitalization of $100 million and will make minority equity-type investments in junior mining companies.


IFC’s Director for Oil, Gas, Mining and Chemicals, Mr. Rashad Kaldany said, “We are proud to support this initiative and to contribute IFC’s global know-how and capability in the mining sector to this important venture.  The project will support empowerment and provide financial resources to develop junior mining in South Africa and the Africa region.”


Ms. Haydee Celaya, IFC Director for Sub-Saharan Africa, said, “One of our key regional objectives is to create jobs by investing in the private sector and are delighted that this fund will help to generate employment.  IFC’s role is further improved by our potential to bring our expertise in sustainable development to this venture and to enhance the partnerships we are building throughout the region.”


Mr. Arthur Mashiatsidi of Decorum Capital Partners, the Fund Manager, said, “We are confident that IFC’s presence as an investor in the New Africa Mining Fund will provide comfort to other international institutions and pave the way for their participation.  We look forward to working with IFC and other investor participants in realizing the fund’s objectives.”

Mr. Richard Linnell, Trustee of the New Africa Mining Fund, said, “This signing of the agreements with IFC is a result of concerns generated at the Bakubung initiative some 30 months ago.  This initiative was a desire to solve the historical imbalances in the mining industry by facilitating growth and providing opportunities for new entrants.”


IFC’s current portfolio in Sub-Saharan Africa amounts to $1.6 billion, of which $170 million is in South Africa and is spread over a number of sectors, including manufacturing, energy, financial services, private equity funds, and hotels.  Companies that have received financing from IFC include the life assurer, African Life Assurance Company Limited; the mortgage securitisation company, South African Home Loans; Tusk Construction and Support Services, which provides small emerging contractors with project management services and working capital loans; and Lesedi Hospital, among others.


IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956 through June 30, 2002, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.

SOUTH AFRICA JUNIOR MINING FUND (JSA)