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IFC Global Mining

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					IFC Global Mining
                                      The World Bank Group

                   IBRD                           IDA                       IFC                    MIGA
            International Bank               International         International Finance        Multilateral
            for Reconstruction               Development                Corporation           Investment and
             and Development                  Association                                    Guarantee Agency
                  Est. 1945                    Est. 1960                  Est. 1956                Est. 1998


Role       To promote                   To promote                 To promote private      To reduce political
           institutional, legal and     institutional, legal and   sector development      investment risk
           regulatory reform            regulatory reform


Clients    Governments of member        Governments of poorest     Private companies in    Foreign investors in
           countries with per           countries with per         member countries        member countries
           capita income between        capita income of less
           $1,025 and $6,055            than $1,025


Products   • Technical Assistance       • Technical Assistance     • Equity/Loans          • Political Risk
           • Loans                      • Interest Free Loans      • Risk Management         Insurance
           • Policy Advice              • Policy Advice            • Advisory Services




                                                            2
                   Over $97 Billion Invested Since 1956

• Largest multilateral source of loan/equity financing                           IFC FY2011 Highlights
  for the emerging markets private sector
                                                                     Portfolio                          $42.8 billion
• Founded in 1956 with 182 member countries
                                                                     Committed                          $12.2 billion
• AAA-rated by S&P and Moody’s
• Equity, quasi-equity, loans, risk management and                   Mobilized                              $6.5 billion
  local currency products                                            # of Companies                               1,737
• Takes market risk with no sovereign guarantees                     # of Countries                                    127
• Promoter of environmental, social, and corporate
  governance standards
• Resources and know-how of a global development                            Sub-Saharan       Middle East
                                                                               Africa         & N.Africa
  bank with the flexibility of a merchant bank                                                                Global
                                                                                14%              11%            1%
• Holds equity in over 722 companies worldwide, 184 of
                                                                                                                       South Asia
  which are funds                                                                                                         10%
                                                              Europe &
                                                             Central Asia
                                                                26%

                                                                                                               Latin
                                                                                  East Asia                   America
                                                                                  and the                       24%
                                                                                   Pacific
                                                                                    14%




                                                         3
                       IFC’s Global Reach
                 100+ country and regional offices worldwide




                                                            Moscow

                                                                        Almaty

                Washington
                                                             Istanbul
                                                    Cairo                New Delhi
Mexico City
                                                                                     Hong Kong
                                  Dakar
                  Port-of-Spain
              Bogota
                                                             Nairobi




               São Paulo                     Johannesburg

                       Buenos Aires

                                          IFC HQ/Hub Offices
                                          IFC Operational Centers
                                          IFC Country Offices




                                               4
             $500 Million Mining Portfolio (57% equity)
                              37 Projects in 25 Countries
                                     Book value as of June 2011

                     By Product                                           By Region


                Diamonds                                   Eastern &                   MENA 2%
                   10%                                   Central Europe                World 2%
                                                              11%
                                                  East Asia &
                                                    Pacific
                                                      9%
             Other Metals            Gold
                                                                                Sub-Saharan
                 22%                 44%
                                                                                   Africa
                                                                Latin America
                                                                                    56%
                                                                     22%
Aluminum &
  Bauxite                   Copper
    4%                       12%

       Iron Ore 9%




                                                   5
                                   IFC Value-Add in Mining

  Long-Term          Regional          Global Mining         Country Risk   Environmental         Advisory
 Competitive        Knowledge            Expertise            Mitigation     & Social Risk        Services
  Financing                                                                  Management
• Equity          • Extensive         • 50+ Years of        • Government    • Advice on        • Local Supplier
                    Local Office        Sector                Relations       Environmental      Development
• Fixed &           Network             Experience                            & Social Best
  Floating                                                  • World Bank      Practices        • Local
  Rates, Local    • Local             • Greenfield            Synergies                          Economic
  Currencies        Transaction                                             • Equator            Development
                    Experience        • Expansion /         • Withholding     Principles
• Up to 15 Year                         Modernization         Tax Benefit     Modeled after    • Community
  Loan Maturity   • World Bank                                                IFC Standards      Development
                    Synergies         • Corporate                                                Funding
• Catalyst for                          Strategy                            • Local
  Other                                                                       Consultation &   • Financial
  Investors and                       • Access to                             Disclosure         Valuation Tool
  Lenders                               International
                                        Investors                                              • Resource
• Capital                                                                                        Efficiency
  Mobilization                        • Technical
                                        Advice




                                                        6
    Financing & Sustainability Expertise Under One Roof



                                                         IFC Mining
                                     Integrated Solutions Combining Capital and Expertise


Financing                                                          Advisory Services

•   Equity                                                         •   Supplier development (linkages)
•   Quasi-equity                                                   •   Community Development
•   Loans                                                          •   Municipal Capacity Building
•   Capital markets access and mobilization                        •   World-class environmental and social advice
•   Risk management                                                •   Resettlement & Indigenous Peoples
•   Frontier countries                                             •   Access to Community Development Funding


• IFC’s package deal brings together world-class talent, a global outlook and a social/environmental
  mandate to deliver sustainable business solutions; IFC’s team includes finance professionals,
  mining engineers, environmental and social specialists, development experts, and
  communications specialists




                                                              7
                          IFC: The Complete Package
IFC Investment & Advisory Services

                    Project          Ahafo (Ghana)

                    Investment       $75 million A Loan, $10 million B Loan

                    IFC Role         • IFC social and environmental specialists supported complex resettlement process
                                       that affected close to 10,000 people
                                     • IFC Advisory Services helped increase # of women working at the mine and designed
                                       a supplier program enabling entrepreneurs to deliver goods and services to
                                       Newmont
                    Project          Simandou (Guinea)

                    Investment       $35 million (5% equity stake)

                    IFC Role         • IFC Advisory Services is working with Rio Tinto to establish and manage a national
                                       mining supplier development and training program


                    Project          Tulu Kapi (Ethiopia)

                    Investment       $15 million equity

                    IFC Role         • IFC and Nyota are designing a program to help build long-term relationships with
                                       local communities in the context of an exploration project




                                                          8
                                   When Does IFC Invest?
IFC in the Project Life Cycle
• IFC funds projects in all stages of development

                                                        Project
                                                        Finance
                                  Project
                                 Discovery

                                                                       Mature Production
       Value




                                                    Senior Debts and
               Grassroots                              Equivalents
               Exploration


                              Quasi-Equity /
                  Equity        Mezzanine




                                                        Time




                                                          9
        A Broad Range of Financial Products

                 •   Corporate
                 •   Typically 5-15% shareholding
    Equity       •   Long-term investor, typically 6-8 year holding period
                 •   Not just financial investor, adding to shareholder value
                 •   Usually no seat on board




                 •   Subordinated loans
 Mezzanine /     •   Income participating loans
                 •   Convertibles
 Quasi-Equity    •   Other hybrid instruments



                 •   Senior Debt (reserve-based lending. corporate finance, project finance)
                 •   Fixed/floating rates, US$, Euro and local currencies available
                 •   Commercial rates, repayment tailored to project/company needs
Senior Debts &   •   Long maturities: 7-12 years, appropriate grace periods
 Equivalents     •   Range of security packages suited to project/country
                 •   Mobilization of funds from other lenders and investors, through financings,
                     syndications (IFC “B” Loan structure), underwritings and guarantees




                                       10
         IFC as a Strategic Partner: Equity Investments

General IFC Offerings and Criteria


                     IFC Advantages                                                Criteria for Investment

• IFC acts as a long-term strategic partner, cornerstone           • Not largest shareholder, not more than 20% ownership
  investor                                                         • Typically does not seek a board seat; not involved in
• Ability to participate at project or corporate level               general management but will help with E&S issues
• Deep pockets for future support                                  • Large resource potential
• Demonstration effect: possibly catalyze further financial        • Regions of strategic interest to IFC
  support from other investors                                        IDA country, frontier regions of non-IDA countries
• Support for international listing                                • Formal E&S risk management system
• Third-party, neutral, honest broker                              • Transparency
• Advisory Services                                                   Payments to government (EITI)
   Strategic community investment, linkages, other                   Contract/License
• Best practice environmental and social practice
   Includes special environmental and/or social issues,
    such as resettlement or indigenous peoples
• Direct government engagement
• World Bank Group synergies




                                                              11
           IFC as a Strategic Partner: Debt Investments

General IFC Offerings and Criteria


                     IFC Advantages                                                Criteria for Investment

• IFC acts as a long-term strategic partner                        • Project anticipated to have major development impact
• Deep pockets for future support                                  • Long mine life
• Demonstration effect: possibly catalyze further financial        • Role for IFC in environmental and social issues or
  support from other debt providers                                  Advisory Services
• Mobilization (“B Loan” structure)                                • Regions of strategic interest to IFC
• Possible corporate finance in special situations                    IDA country, frontier regions of non-IDA countries
• Potential political risk carve-outs                              • Transparency
• Third-party, neutral, honest broker                                 Payments to government (EITI)
• Advisory Services                                                   Contract/License
   Strategic community investment, linkages, other
• Best practice environmental and social practice
   Includes special environmental and/or social issues,
    such as resettlement or indigenous peoples
• Direct government engagement
• World Bank Group synergies




                                                              12
                                             Advisory Services

• IFC relies on 50+ years of experience of working in developing countries to develop practical, sustainable business
  solutions for its clients



                Community Development                                             Corporate Governance

• Community investment strategies                                • IFC works with the different governance priorities:
• Measuring the impact of community spending                       Publicly listed companies
• Increasing participation of local businesses in supply           Founder and family-owned firms
  chain
                                                                   Financial institutions
• Business skills training for local entrepreneurs
                                                                   Newly privatized and state-owned enterprises
• Promoting female workforce
                                                                 • IFC Corporate Governance experts advise clients on:
• Helping local governments manage mining revenues for
                                                                   Defining shareholder rights
  economic development
                                                                   Creating a solid control environment
• Water risk/footprint assessment
                                                                   Ensuring high levels of transparency and disclosure
• Energy efficiency analysis to reduce water, energy and
  raw materials use                                                Setting up an empowered board of directors




                                                            13
                                Examples of IFC Investments

                      Ghana                     Guinea                          Chile                    Tanzania                 South Africa



        Ahafo                                             Escondida Copper
                              Simandou/RioTinto                                             Williamson                    Lonmin
    $75,000,000                                                $94,600,000
                                  $35,000,000                Senior Term Loan               $40,000,000                $100,000,000
  Senior Term Loan                   Equity                                               Senior Term Loan            Senior Term Loan
     $10,000,000                                               $15,000,000
                                                                                             $10,000,000                $50,000,000
   Syndicated Loan                                                Equity
                                                                                                Equity                      Equity
Mandated Lead Arranger           Equity Investor          Equity Investor & Lender      Equity Investor & Lender    Equity Investor & Lender
        2006                         2006                     1989 and 1999                      2010                        2006




                       Peru                        Peru            Solomon Islands                       Morocco                       Ethiopia




                              Antares Minerals                Gold Ridge                  Achmmach Tin                      Dallol
Minera Quellaveco
                                  $12,800,000                                                 $5,700,000                 $10,000,000
     $42,000,000
                                     Equity                    $30,000,000                      Equity                      Equity
        Equity
                                                                  Debt

    Equity Investor              Equity Investor          Mandated Lead Arranger            Equity Investor             Equity Investor
     1993-2011                       2009                         2010                           2010                        2011




                                                                    14
                                          IFC Mining Team
                                                       Tom Butler
                                                          IFC
                                                    +1.202.473.5989
                                                    tbutler@ifc.org


                                                     Tom Bruington
                                                     Chief Engineer
                                                    +1.202.473.0651
                                                   tbruington@ifc.org

      Latin America                     Africa                                Asia                     Europe & MENA
          Louis Vos                 Stephan Vermaak                      Brian McNamara                 Robin Weisman
Principal Investment Officer   Principal Investment Officer        Principal Investment Officer   Principal Investment Officer
     +1.202.458.5934                 +27.11.731.3148                    +1.202.473.0461                 +1.202.473.0174
       lvos@ifc.org                 svermaak@ifc.org                   bmcnamara@ifc.org               rweisman@ifc.org

     Juan Jose Rossel              Christian Mulamula                   Karsten Fuelster               Gustaf Lilliehook
 Senior Investment Officer      Senior Investment Officer           Senior Investment Officer         Investment Officer
      +51.1.611.2520                +1.202.458.1218                     +62.21.2994.8036               +46.708.559.338
      jrossel@ifc.org              cmulamula@ifc.org                    kfuelster@ifc.org             glilliehook@ifc.org




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