EFIC helped provide a direct loan to African Underground Mining Services Limited

Contract mining company African Underground Mining Services Limited (AUMS), a joint venture of Australian companies Barminco Limited and Ausdrill Limited, was expanding its business in West Africa with new contracts.

The company needed finance to acquire equipment, including mobile plant and equipment, to perform underground mining contracts at Red Back Mining Inc’s Chirano gold mine and Newmont’s Ahafo gold mine in Ghana and at Randgold Resources’ Gara gold mine in Mali, and to provide working capital for its operations in Ghana and Mali.

Export Finance and Insurance Corporation (EFIC), with Caterpillar Financial Australia Limited (CFAL), provided a four year, $US30 million loan facility to AUMS. EFIC’s loan was US$15 million.

After the global financial crisis, commercial credit for transactions in emerging markets remained constrained. However, EFIC’s support enabled AUMS to choose equipment manufactured by Caterpillar in Tasmania to undertake the contracts over that of a European competitor which was also offered with export credit support.

EFIC’s financial support achieves three important outcomes:

• AUMS has the funding required to expand its business in an increasingly important commodity-rich region of the world where commercial lenders are not always prepared to take on risk
• the contracts give AUMS’ corporate shareholders an opportunity to capitalise on the mining expertise that they have developed over many years, and to earn management and technology transfer fees
  support for employment through the purchase of locally manufactured equipment, despite strong foreign competition.

“AUMS is a young company, but we have two very experienced shareholders. EFIC’s financial support is critical to the achievement of our development ambitions for AUMS”, said Neil Warburton, Director, AUMS.

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