Australia's EMR closes latest mining fund at $860 million
Australian resources-focused PE investor EMR Capital has reached a final close of $860 million on its second mining fund, above the target of $750 million.
The fund will seek investments in copper, gold, potash and coking coal, like EMR's first vehicle which closed last year at $450 million. EMR is particularly interested in copper given strong demand in India and China, and plans to focus on opportunities in Australia, where it sees greater availability of assets now compared to two years ago.
LPs for the vehicle came mainly from North America. CEO Jason Chang told The Australian that investors were eager to join the fund because they perceived growing opportunity for discounted investments in the mining sector. Despite a recent spike in prices for coking coal and other commodities, the firm believes the 12-year time frame for the fund will give it many opportunities during future market swings.
"Our continued focus on copper, gold, potash and coking coal reflects their strong macro outlook, deep and liquid markets, and low substitution risk," Chang said. "As demand for commodities from global markets, especially China and India, continues to grow, we see the special features of the mining sector as ideal for private equity investments, as demonstrated by our track record in this space."
EMR plans to invest in only 5-6 projects from the fund, and will seek controlling positions. Investments from Fund I include leading a consortium last year to buy Indonesia's Martabe gold mine for $775 million including debt, and buying Australia's Mt. Gordon copper mine from India's Aditya Birla Minerals this year for A$15 million ($10.8 million).
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