Mine Latin America November 15, 2013

Transcription

1 Mine Latin America November 15,

2 About EDC s export credit agency Develop and expand s international trade Financing and insurance solutions for Canadian exporters and investors Partnership preferred philosophy Focus on market gaps Operate on commercial principles Financially self sustaining 2

3 Connecting with Canadian Businesses Across 17 offices across Edmonton, Alberta St. John s, Newfoundland and Labrador Vancouver, British Columbia Calgary, Alberta Regina, Saskatchewan Winnipeg, Manitoba Québec City, Quebec Montréal, Quebec Moncton, New Brunswick Halifax, Nova Scotia Drummondville, Quebec Ville St-Laurent, Quebec Ottawa, Ontario 3 Toronto, Ontario Mississauga, Ontario Windsor, Ontario London, Ontario

4 Expanding Global Reach 16 international offices North America / Caribbean $46B (53%) Asia-Pacific $19B (21%) Europe $11B (13%) South / Central America $6B (7%) Africa / Middle East $5B (6%) Total Volume = $87 B % = percentage of EDC s total business volume Moscow, Russia Mexico City, Mexico Monterrey, Mexico Dusseldorf, Germany Istanbul, Turkey Beijing, People s Republic of China Shanghai, People s Republic of China New Delhi, India Bogata, Colombia Mumbai, India Singapore Lima, Peru Santiago, Chile Rio de Janeiro, Brazil São Paulo, Brazil Abu Dhabi, UAE Location of EDC Representation 4

5 Nature of EDC Support to Mining Corporate Debt: syndicated and bilateral on commercial terms. Project Finance: non-recourse support for the development of assets. Reserve based lending. PRI: mitigating political risk (asset & equity) Performance Assurance: 100% backstop for standby L/ C s and surety bonds. Reclamation and min work. Credits Insurance: insuring Canadian exporters against payment default by foreign buyers. Market Intelligence: country & economic 5

6 Mining Volume Sector and (Latin America) Financing $659M ($79M) $1.1B ($345M) Ø Mexico, Chile, Peru Political Risk Insurance $549M ($397M) $550M($390M) Ø Dominican Republic, Argentina, Chile, Peru Credit Insurance $9.7B ($1.5B) $11 B ($1.8B) Ø Brazil, Guatemala, Colombia Bonding $622M ($3.8M) $657M ($3.5M) Ø Brazil, Peru TOTAL $11.6 B ($1.98B) $13.2B($2.5B) Mining contributed 13.3% of EDC s 2012 total business volume Latin America contributed 17% of mining volume in

7 Mining Sector Priorities Developing identified markets of interest with limited trade relationships. Primary Markets of Interest in Latin America Chile, Mexico, Brazil, Peru, Colombia Continue to develop our database of supplier capabilities Attend key tradeshows and events (Extemin in Peru) Market intelligence on key foreign borrowers EDC sponsored matchmaking sessions Leverage our strategic partners (CAMESE, DFAIT and banks) 7

8 Key Issues in Latin America 1. Strong legislation and poor bureaucracies to enforce. 2. Lack of state presence in remote areas: know what dark forces are active in your area: narcos, illegal mining, contraband. 3. Great community relations a must but not a guarantee. 4. Water WILL be used as a pretext to attack the project. 5. Permitting will take 4x longer than you planned, so budget for it. 6. NGO's can be your friend. 8

9 Recent Trends in Mining Mining companies have faced a challenging market environment over the past two years. Key trends that EDC has observed include: 1.Escalating Costs Input costs for mining construction and production remain elevated through, with labour escalation and steel prices being major contributors. Remote mine locations are impacting capital and operating costs (e.g. increased infrastructure, higher opex) 2.Sources of Equity / Streaming Agreements Junior mining players continue to struggle to secure equity funding in the current market environment. Private equity funds are beginning to explore the space, and proposing unconventional project financing structures. Resource streaming agreements are beginning to surface in project financing structures, especially in junior financings. 3.Grades & Cost Curve Positions Ore grades have been decreasing, resulting in new mines and expansions which are positioned relatively higher on global cost curves. 4.Resource Nationalism Governments are seeking larger stakes and higher returns from projects 9

10 2010- Selected Financing Transactions 2010 Vale Inco 1 billion 2010 Dom Rep Pueblo Viejo M 2011 Agnico-Eagle M 2011 Chile CAP S.A M 2012 IAMGOLD M Yamana Gold M Kinross Gold M Mexico Minero Frisco M Chile Codelco mln Lundin Mining M Chile Minera Escondida M Silver Wheaton M UK Anglo American M India Tata Steel M Chile Minera Antucoya M 10

11 11 Selected EDC Customers