Climate Conscious Investors Shut Off Financing to Mining Companies

Climate Conscious Investors Shut Off Financing to Mining Companies

As Environmental-Social-Governance (ESG) concerns mount across the globe, investors are giving ‘dirty’ sectors, such as heavy industry and mining, the cold shoulder. With funding spigots drying up, miners are facing a financial crunch, rising costs of capital, and the prospect of shelving projects.

At the forthcoming Investing in African Mining Indaba Conference in Cape Town, the need for using sustainable and renewable energy in mining will rank in importance alongside arranging new sources of finance, says Journal Pioneer.

“Even for companies that have good projects, it’s very difficult for them to raise any money in these markets,” said Caroline Donally, managing director at a private equity firm. “Previous investors who would provide equity appear to have withdrawn. A number of specialist funds have shut up shop, and generalists aren’t investing in commodities anymore.”

Unsurprisingly, global investors have singled out coal mining for punishment, given that it is responsible for 40% of energy-related CO2 emissions.

Western banks have stopped financing coal miners, and Norway’s sovereign wealth fund completely divested all its fossil fuel holdings. In South Africa, Nedbank has stopped funding coal-related projects.

“If you’re a small coal explorer, I don’t think you stand much of a chance of raising any money at all,” says Fred White, associate director at Medea Capital Partners in London.

Read the JOURNAL PIONEER article HERE.

Image (no changes were made) Source Of Norway’s Norges Bank: Flickr


About the Author:

Leave A Comment