Export Finance and Insurance Corporation (EFIC) , with finance company Caterpillar Financial Australia Limited is providing a four-year US$30m loan facility to African Underground Mining Services Limited (AUMS) for its contract underground mining operations in Ghana and Mali.
EFIC’s share of the loan amounts to US$15 million.
AUMS has entered into three contract mining agreements in Ghana including two at Red Back Mining Inc’s Chirano gold mine and one at Newmont’s Ahafo gold mine in addition to one contract mining agreement at Randgold Resources’ Gara gold mine in Mali.
AUMS will use the facility to acquire equipment including mobile plant and equipment manufactured by Caterpillar in Tasmania to perform the underground mining contracts as well as to fund working capital for its operations in Ghana and Mali.
Since the global financial crisis, commercial credit for emerging market risks has remained constrained. EFIC’s support will enable AUMS to acquire Australian-built equipment to undertake these important contracts and expand its operations in West Africa.
EFIC’s support has been a key factor in AUMS’s choice of an Australian equipment supplier over a European manufacturer also having export credit support.
“While AUMS is a young company, we have two very experienced corporate shareholders. EFIC’s financial support is critical to the achievement of our development ambitions,” said Neil Warburton, Director, AUMS.
“This facility demonstrates the benefits EFIC can bring to Australian companies growing their businesses offshore,” said EFIC Executive Director, Origination and Portfolio Management, Peter Field.
“While a business proposition may be sound, the perception of risk in emerging markets often limits the availability of commercial finance.”
According to Mr Field, the transaction is important in three ways:
- It enables AUMS to expand into an important, developing market
- It supports the export of expertise developed by AUMS’ shareholders, Barminco Limited and Ausdrill Limited
- It supports local employment in the manufacture of the capital goods required to undertake the contract