The piece “Standard Bank dangles financing solutions for mining sector” featured below was initially published in Malawi’s Mining Review Issue Number 28 2015 that is circulating this August 2015.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
Standard Bank dangles financing solutions for mining sector
“Our appetite for mining projects is quite strong; we plan to bank each miner in the country”
Standard Bank says it has a comprehensive suite of financing solutions for the mining and metals sector in Malawi and across Africa.
Standard Bank Malawi Chief Executive Officer Andrew Machanda tells Mining Review in an exclusive interview that the products on offer include project finance, corporate finance advisory solutions, working capital facilities, bridging finance, acquisition finance, inventory financing, structured trade and commodity finance, commodity price risk management solutions, foreign exchange and interest rate hedging.
We are always ready to finance business ventures with an established business plan and viable outlook,
He says with MWK32.7 trillion Kwacha in gross loans and advances at the end of 2014, Standard Bank Group, definitely, has the financial muscle to finance large-scale mining ventures in Malawi.
Mashanda also says as Africa’s largest bank with a strong presence in Malawi, Standard Bank’s strength and passion is for Africa as a region so when clients speak with Standard Bank Malawi, they are actually having a conversation with an entire regional backbone, which has trillions of dollars in stock for project financing.
2015 has so far been challenging for the global mining industry. In terms of the outlook, commodity prices are not anticipated to exhibit material improvement, impacting on sector valuations and the ability to raise financing. But Standard Bank Group research shows that African mining remains underexplored. In 2013, African exploration accounted for 17% of the worldwide exploration budget despite the fact that the continent holds more than 30% of the world’s mineral resources. So amid a more sober outlook, the prospects for mining in Africa remain essentially intact over the medium term. And although cautious, our appetite for mining projects, especially in an untapped market such as Malawi, is quite strong.
He explains that due to its history as a mining bank and enduring expertise in the sector, Standard Bank understands mining sector clients’ individual requirements.
Standard Bank group’s activities in mining dates back to the development of the Kimberley diamond fields in South Africa in 1878 and since then the Bank has evolved as a key financier in numerous landmark mining projects throughout Africa.
Our multi-disciplinary teams based in key financial hubs around the world strongly position us to assist our clients in dealing with the rising opportunities and associated risks and challenges in this sector,
In 2012, Standard Bank was among the syndicate banks that provided US$180-million in project financing for the Kayelekera Uranium Mine, which is so far Malawi’s largest mining investment.
In Zambia, Standard Bank acted as a joint lead arranger to First Quantum Minerals on their recent US$1-billion corporate financing. The facility provides the company with funding lines for planned capital works at Kansashi and the construction of the Sentinel Project in Zambia, which has an estimated capex cost of US$1.7-billion.
In Namibia, Standard Bank was appointed as the sole lender and arranger to De Beers Marine Namibia (Debmarine) on a US$70-million term facility.
As part of an international banking group, we are able to structure much larger capital injections for our clients with easier access to foreign currency where need be. Standard Bank aspires to be the leading Corporate and Investment Bank in, for and across Africa with a deep specialisation in natural resources,
Mashanda also explains that Standard Bank’s strategic presence in key funding markets such as Johannesburg, London, New York, Dubai, Hong Kong, Beijing and Singapore enables it to connect to various pools of capital.
Standard Bank has also a strategic partnership with Industrial and Commercial Bank of China which owns 20% shareholding in the Bank.
This relationship has enabled us to partner with key Chinese investors in some major projects in Africa,
Standard Bank boosts as the only bank in Malawi with a fully fledged investment banking division, which is able to assist mining companies in sourcing capital locally and through international markets.
Mashanda says the Bank is also well positioned to serve clients including multinationals that are involved in international transfer of funds as it has stayed abreast with international money transfer technologies.
The digital revolution is here and Standard Bank is a key player in using information technology to deliver unprecedented digital platforms to our customers,
The system keeps an 18-months transaction history and allows customers to check their account balances, transfer funds between accounts and make payment from the comfort of their offices.
The system is compatible with accounting systems such as SAP and sends email and SMS alerts as agreed before hand with the customer.
This also implies that our customer does not have to visit every bank to which they are making payment as they can submit a single file that makes payment to all banks in Malawi,
He says the Bank’s Electronic Funds Transfer System enables its customers to make bulk payments like salaries and contractor/supplier payments securely and efficiently.
Our digital payment systems mean that mining companies do not have to expend their resources to take salary and allowance money to the employees working in the field. They can instead use the technology platforms we provide to pay their employees in the field through the mobile banking platforms. The employee will then go to the nearest agent to get cash if they need to do so. Our clients will also benefit as it means their employees do not have to spend long periods travelling back and forth to check their balances or pay bills during working hours.
With the digital platforms that we offer, we see no reason why payments should be delayed as delays usually affect the relationships between customers and their counterparts, be it suppliers or staff. With these technologies, we believe that Standard Bank is in the opportune position to meet the transactional demand of the mining industry and the country as a whole.
Standard Bank also offers companies the opportunity to provide their employees with accessible, flexible and relevant personal financial solutions.
Mashanda explains that through its workplace banking capability, the Bank is able to conduct banking services on site for the employees as agreed with their employer.
He explains that even though the Bank offers this service at no additional cost for the employer, it offers affordable banking services to the employees across all levels in the organisation.
As for the employees, the Bank offers them everything from current accounts, savings accounts and various types of loans with competitive disbursement times.
The Bank has also recently started to offer the “funeral plan” product to customers to cover funeral expenses.
Standard Bank is heavily invested in delivering excellent and competitive digital banking solutions and we hope that by doing so, we are able to be there for customers where we do not have physical presence. Clearly we intend to be the miner’s bank, and we plan to bank each miner in the country, says Mashanda.