What key projects has RMB embarked on in the mining sector in the past couple years?
RMB has been involved with most of Namibia’s major mining and resources projects over the past few years. We are proud to have been an integral part of the development of the N$ 4bn Otjikoto Gold mine opened by the President, Dr. Hage Geingob, on 1st June this year, as well as being an MLA and funder to the SS Nujoma, the DebMarine exploration vessel currently being built as well as their recently commissioned mining vessel, the Mafuta. Together these two vessels capital cost exceeds N$ 3bn. RMB team members have also been close to the development of Husab uranium, Namibia’s largest mining project.
We are also integrally involved in the advising, banking, arranging and financing of the N$2,5bn Ohorongo Cement plant and are bankers, advisors and/or lenders to a number of Namibia’s premier exploration and mining companies.
RMB has played a major role in many projects, what lessons have been learnt from such success?
Lessons learnt include getting involved early, picking winners and forming lasting value-added partnerships with corporates with whom we share values and long-term objectives which support national visions and goals.
How does RMB pick its projects? What is involved?
We have a multi-disciplinary team of financial and technical experts who are able to assess projects early in their lives and to take a firm view on winning- projects, companies and management teams. We look for long-term relationships, avoiding speculative and opportunistic players, even at the cost of short-term gains.
We specialise in resources, infrastructure, energy and large real estate and have leading expertise in these areas. We also bank and finance many of the key players in the retail, financial and business services, manufacturing, services, fisheries, tourism and agriculture sectors. We focus on the top- FDI and indigenous corporates, including the commercial SOE’s and provide banking, funding and advisory services to many of Namibia’s leading entities. We also provide these services to key ministries and national/governmental agencies in raising Capital Markets debt.
How is RMB positioning itself to continue being a value-added partner in the mining industry?
Mining is certainly one of our key focus areas and we employ three mining professionals including a mining engineer and a geologist/mineral economist. We also have a dedicated coverage/ relationship management team for resources as well as a specialised credit approach. This enables us to track all exploration, mining and value-addition projects in the resources sector and take calculated risk in a sector which is known to be risky.
For companies out there that need financing and that want to engage RMB, what is the process? Where should they start?
While we do engage in early advisory activities and are happy to bank credible companies from an early stage, we only consider funding of advanced projects which have reached a resources or reserves stage of development. We are always happy to chat to all-comers and can sometimes guide small companies in the right direction or match-make them with technology or early-funding partners.
Where are the challenges?
There are many. From making sense of the early stage EPLs, where not much work has been done, to finding early equity or partners to move projects to the next stage, to banking the large and mega-projects which have foreign sponsors. On the large projects, there is generally an assumption that Namibian banks cannot play a meaningful role. This assumption has been proved wrong in the cases of Langer Heinrich, Otjikoto Gold, Ohorongo Cement and the various DebMarine vessels where Namibian banks have indeed been significant funders.
What still remains of the ‘Growth at home’ strategy?
Namibian mines have done a lot to encourage ‘Growth at Home’ in procurement, management, training and skills development, enterprise development and in ownership. The Chamber of Mines has played a strong catalytic and coordinating role in its members adopting a Mining Charter which advances all these elements. Epangelo Mining has also begun to play a role in becoming a local shareholder representing government’s interests in mining projects and is becoming more capable in pursuing its primary role in advancing exploration of strategic minerals’ EPLs. The Chamber is also working actively with Government on the value-addition opportunities in the mining sector.
What is still largely missing is the local private equity or venture capital for Namibian projects. The Namibian Stock Exchange has not yet been able to raise significant capital for mining projects and a few foreign private equity firms have recently invested in Navachab and Tschudi mines but most of the capital for mining has come from foreign stock exchanges or direct FDI investors. These sources of funding are critical to the future development of mining and should be actively fostered. Namibia’s recent top-ranking in Africa by the Fraser Institute will continue to encourage FDI investors to choose Namibia above competing destinations. Namibian miners, investors and funders should continue to partner these foreign institutions and policies should be developed to encourage such partnerships.