The Anglo American Khula Fund invests in commercially viable junior mining projects
Launched in 2003, the Anglo American Khula Mining Fund is a joint initiative between Anglo American and Khula Enterprise Finance Limited, a government-owned entity that promotes small and medium enterprise development.
The fund, which focuses on promoting mining-related investments, is managed by Anglo American Zimele. It is based on an effective and replicable business model that aims to boost the South African mainstream economy and support the South African government’s initiatives by helping emerging black-owned mining operations with commercially viable prospects.
The barriers typically faced by aspirant miners include ubiquitous prospecting permits, lack of access to development capital and the shortage of sound advisors and guidance appropriate to the needs of emerging mining companies.
As a value-adding relationship investor, the fund assists such mining enterprises with equity and loan finance at prime interest rates, complemented by technical support during the high-risk exploration and pre-feasibility stages of projects. This brings them to commercially bankable positions at which point mining entrepreneurs can approach commercial lending institutions and raise finance for the commissioning of mining operations.
In addition to the traditional mining-related areas of expertise, the financial support extended to investee companies is complemented by hands-on business support and guidance in areas such as broad-based black economic empowerment (BEE), corporate governance, safety, health, environment, legal, accounting, company secretarial aspects and public relations.
The fund insists on partnered BEE entrepreneurial skill, day-to-day involvement by the partner as well as a personal equity contribution, as the lack of these has led to the demise of numerous companies.
Further to this, it has access to world-class technical, engineering and mining expertise within our core businesses.
Services
As well as providing loan finance and technical expertise, the fund offers:
- Assistance with the selection of the BEE partner, where possible
- Assistance with the integration of the BEE partner into the business
- Provision of equity and loan finance for the development of mineral projects
- Assistance with company formation and the provision of ongoing company secretarial and administrative services
- The creation of a training and development plan for the transfer of skills to the BEE partner
- General mentoring and coaching of the BEE partner
- Assistance with marketing the business to our business units specifically for supply linkages, market development and expansion
- Provision of ongoing strategic, operational, financial and business support through representation on the board in a non-executive capacity
- Guidance on corporate governance issues, corporate ethics, safety, health and environment standards and HIV/AIDS
- Access to our disciplines, such as technical, legal, employee relations, human resources, public affairs and media relations
Guidelines
Individual investments by the Anglo American Khula Mining Fund extend up to R20 million per deal. Should the fund acquire an equity stake in the business, this would not exceed 49% of the share capital of the investee company.
Find out about the Anglo American Khula Mining Fund’s evaluation criteria and application processes.