The US-based mining-focused private group Orion Resource Partners is raising up to half a billion US dollars in a fund to finance potash, tungsten and iron ore mines. Miners are turning to alternative source to secure finding as the sector has had difficulties to woo back traditional financial sources despite the recovery of commodity prices from the crash in 2015-2016.
Orion is expected to provide royalties and streams and close the fund within a few months. Streaming and royalties are types of alternative finance for the mining industry and typically include a payment made in advance to a miner, which then repays it through the supply of metal later. Orion’s investors – sovereign wealth funds, pension funds and other long-term funders – had expressed interest in having exposure to mining for long-term projects that would pay reliable dividends over time. Potash prices have begun to rebound as mine closures have curbed supply of the crop nutrient. The recent data also show that investors are still shying away from the mining industry and withholding new financing despite a price rally.
Orion said earlier this year that it raised US $ 2.1 billion for a fund that would financially cover the construction of the later stages of some mining projects through a combination of debt, equity and production-related investments. Orion Resource Partners is a global alternative investment management company managing funds of around $4.5 billion. The company specializes in institutional metals and mining investment strategies in the base and precious metals space.