The energy transition is a boon for the mining industry. Huge volumes of metals is needed to build the clean energy infrastructure required to decarbonize the global economy. But current plans for new supply fall far short of anticipated demand. Governments have developed critical minerals strategies.
Mining companies see a growing market for many metals but too few are building new mines. Investors want exposure to the energy transition and yet the mining sector is struggling to attract capital.
There is a huge opportunity for the mining industry to supply the energy transition but unless companies, governments and investors pull in the same direction, new mines will not be built, production will not increase and the transition will stall.
The opportunity to invest in mining projects is exciting and lucrative where one invests in the right project. However, there are many issues that one needs to consider before diving into a mining investment. This brief shall explore some of the critical issues that need to be assessed by a prospective investor, be it a small or large-scale project.
APKA follows a structured process of assessing a prospective opportunity based on Global Best Practice Standards while conducting the due diligence exercise. To acquire all the information referred to in this Brief, the Parties need to sign a non-disclosure and non-circumvention agreement to ensure that safeguards are in place to avoid the misuse or negligent handling of information divulged between the Parties during this process.
APKA conducts the exercise from the perspective of the investing party, that is, the person/s and/or institution/s who has been invited and/or the person/s and/or institution/s considering investing in a mining project.
APKA deep dive seeks extensive knowledge of the potential partner, the state of progress on the project, an on-site inspection to verify what has been physically established, and analysis of all documentation available regarding the proposed project scope and terms. The due diligence consideration for established mining companies differs from the issues one would look at with green filed projects.
The potential promoter's appropriate professional legal, geology, and financial expertise is essential when undertaking a due diligence exercise to receive the requisite advice on key considerations. Notwithstanding, some key and common key areas of due diligence include the following framework: