ESG in Mining: Can the industry answer the $40 trillion question?

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The mining industry is facing an unprecedented challenge in the form of ESG, particularly in accessing the global capital markets where assets invested with an ESG mandate are expected to reach $40 trillion in 2020.

Join Buchanan and Emperor at Mining Indaba 2020 for an insightful event with an in-depth panel discussion moderated by Financial Times Natural Resources Editor, Neil Hume, featuring experts from Kaz Minerals, London Stock Exchange Group, Société Générale, Africa Finance Corporation, African Rainbow Minerals and Investec Asset Management. Our panel will give candid and comprehensive views on the poorly understood topic of ESG investment from a variety of perspectives across the mining sector and global capital markets.

Delegates will benefit from insight on how to improve ESG reporting in order to unlock global funds from international investors who are increasingly struggling to justify investing in mining due to ESG constraints.

This event will investigate the following core issues:
  • The different forms of ESG investment funds and indices and how mining companies can be included
  • Where ESG indices and funds get the data they base their investment decisions on
  • The cost of not having an ESG strategy and the impact of reputation on performance
  • How communicating ESG effectively can make a significant difference to a company’s ability to attract capital
  • What the future looks like for mining in a lower carbon and increasingly sustainability-conscious world

Date

Monday 3 February 2020


Location

Ideas Cartel on Waterkant, 71 Waterkant Street, De Waterkant, Cape Town  8001


Timings

Registration – 10:30am
Panel and Q&A – 11:00am – 12:15pm
Networking – 12:15pm – 12:45pm


Moderator

Neil Hume
Natural Resources Editor
Financial Times


Panel

Samaila Zubairu
President & CEO
Africa Finance Corporation

Stéphanie Clement de Givry
Global Head of Metals & Mining Finance
Société Générale

Tom Attenborough
Head of International Primary Markets
London Stock Exchange

Alison Baker
Non-Executive Director
Kaz Minerals & Helios Towers

Nerine Botes
Executive Sustainable Development
African Rainbow Minerals

Unathi Loos
Portfolio Manager
Investec Asset Management


This is a complimentary event by invitation only. To accept your place, request further information or invite a colleague, please email Emma Beech at [email protected] or [email protected].

Mining round-up: Trends observed in 2019

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As we welcome the new year we thought it appropriate to give a round-up of the trends we observed in 2019, how we expect them to pan out in 2020, and how they will affect a mining company’s manner of communications with its shareholders, analysts, and media.

ESG

ESG has been a buzzword for years but in 2019 it picked up momentum. This is partially due to the Brumadinho tragedy that galvanised the Church of England and several other investors (representing over £5 trillion of funds) into action to ensure this type of catastrophe never happens again. We also saw the World Gold Council announce its Responsible Principlessupply chains became the focus of many news articles, and of course Extinction Rebellion had the mining industry as a major target. Mining companies have one of the worst reputations yet overall they are arguably one of the best corporate citizens. The issue is not communicating enough and appropriately. In 2020 this must change. Not only does the level of disclosure need to increase but miners must report within a widely-accepted ESG framework that is aligned with their investors. Otherwise, they will no longer be able to access the global capital markets, which are increasingly investing with an ESG mandate (about half of all investment industry assets – US$40 trillion – in this year alone will fall in this category). In response, Buchanan has formed an ESG team, which includes several members of the Buchanan mining team, to help companies navigate today’s ESG landscape and communicate in a way that resonates with their stakeholders. We are hosting a panel on this topic during Mining Indaba.

Dual-listings

In 2019 several Canadian and Australian companies eyed the London Stock Exchange (LSE) for dual listings. This, of course, makes sense as the LSE is a natural fit with its deep pools of capital, high liquidity, sophisticated and long-term investors, principles-based approach to capital, and investors who continue to want to invest in the mining sector. That said, most companies which have listed in the UK have not raised capital – this begs the question: Why not? To maximise a dual listing and the available liquidity in the UK, mining companies must not only tick the right boxes but keep in mind what UK investors require as far as communications needs are concerned.

M&A

With Goldcorp and Newmont as well as Barrick and Randgold merging in early 2019, there were big expectations that there would be several rounds of non-core-asset divestments and spin-offs with consolidation at the mid-tier level too. It took several months for this to take place but it all came fast and furious – Resolute/Toro, Kirkland/Detour, Equinox/Leagold, and Zijin/ Continental to name a few. This brought some new energy and excitement to the industry but M&A doesn’t have the same ring to it as it used to because mining investors still recall the lack of value the M&A frenzy of the ‘noughties’. This means mining companies that are doing the acquiring must be very explicit in how they expect value to be formed yet conservative with their valuations. And for those being taken over, they must have an explanation of why they are accepting a low premium (which seems to be the new normal).

Looking forward

We expect 2020 to be just as (or possibly even more) volatile than 2019 but as we get ready for Mining Indaba we see more opportunities than challenges for the sector and are looking forward to seeing what the year has in store for the industry.

Will you be attending Indaba? If so, we are available for meetings 3-6 February and would be thrilled for you to attend the Diggers vs Dealers cricket match (Sunday 2 February) and/or ESG in Mining panel (Monday 3 February). Before heading down to Indaba, we are organising site visits for Tharisa, Pan African Resources and Petra Diamonds. You can find more information by emailing [email protected]

GCP Infrastructure

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Our partnership Buchanan has used its strong presence in the Industrial & Infrastructure and Investment Companies sectors to give considered advice and strategic partnership to GCP, as it’s gone from strength to strength.

Growth story GCP Infrastructure is capitalised at over £1bn and is the largest fully listed Infrastructure Investment Company focusing on infrastructure debt. Another key differentiator is that it restricts itself to UK-only investments, reducing foreign exchange exposure for investors.

BioPharma Credit

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Our partnership Buchanan has supported BioPharma Credit with financial communications consulting through a developed engagement programme. This has increased the visibility and awareness of the new fund and its investment case among investment media audiences and the sell side community. We continue to be a strategic partner to the fund on its growth journey.

Growth story A year on from listing on the London Stock Exchange, BioPharma Credit had already raised $1.1bn to fund its unique life sciences debt investment mandate, much of which has been raised and deployed in high profile transactions.

Not just financial communications

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Buchanan unveils new branding

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Buchanan updates branding to reflect evolution into a leading, full-service, business communications consultancy.

Buchanan, one of the UK’s leading business communications consultancies, today unveils its refreshed branding by launching a new corporate website to showcase its corporate identity.

The re-brand reflects a strategic repositioning for the Company, and concludes the successful expansion of its service offering which now encompasses the full spectrum of communications services following the recent addition of an in-house design and branding team.

The design team, headed by Kerrie Palmer, joined in January 2018 and provides a full suite of design capabilities to support Buchanan’s clients’ marketing requirements, as well as ensuring Buchanan’s own marketing materials reflect its reputation as a creative and dynamic consultancy.

With over 100 retained clients across a range of sectors, Buchanan’s offering has continued to evolve, with the Company expanding its advisory services over the years to provide financial PR, corporate PR, crisis and issues management, CSR advice, investor relations and digital communications. Buchanan’s client base comprises a diverse mix of established and growth companies listed on global exchanges, as well as leading private and government owned entities.

As part of the WPP network, the largest communications group in the world, Buchanan advises clients both in the UK and internationally, working alongside affiliate agencies as required to provide a truly global offering.

Commenting on Buchanan’s new identity, Bobby Morse, Senior Partner at Buchanan, said:

“Buchanan operates in an ever-changing industry and it is therefore appropriate that we continue to evolve in order to maintain our reputation as a market leading communications consultancy. Our clients today require creative and coherent communications strategies so we have developed our capabilities to ensure we can act as a one-stop shop for all of their communications requirements.

“The Buchanan brand has a strong legacy which has built up over the years – our brand today reflects the strength of this legacy and couples it with a vibrant look and feel which is representative of our progressive direction of travel.”

For further details on Buchanan, please visit its new corporate website: www.buchanan.uk.com

For further enquiries, please contact
Ben Romney, Partner
+44 (0)20 7466 5000

VR Education Holdings

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Our partnership Buchanan was appointed financial communications partner to VRE shortly after its AIM IPO in March 2018. Our objective was clear: to establish a savvy communications strategy during its first stages of growth as a public company. Since then, we have advised on key messaging and positioning around an exciting stream of news flow – engaging key stakeholders and increasing its exposure within the City and financial media.

Growth story VRE has grown rapidly since its listing. Ithas announced a number of commercial milestones and key partnerships – with leading names such as the BBC and Oculus VR – and has made excellent progress.In just four months, its shares have doubled.

boohoo group

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Our partnership Buchanan was appointed by boohoo group plc to support its AIM IPO in March 2014. Our objective was to differentiate boohoo’s investment case to the already AIM listed circa £4bn company ASOS, whilst taking advantage of investors’ appetite for the growth potential of online retailers. boohoo raised gross proceeds of approximately £300m at IPO.

Growth story Since listing, boohoo’s capitalisation has rocketed from £560m to more than £2bn. It’s now one of the largest companies on AIM and it has continued to deliver growth, both organically, and via the acquisition of brands PrettyLittleThing.com and Nasty Gal – transitioning into a leading global multi-brand e-tailer for 16 to 30-year-olds.

 

Diversified Gas & Oil

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Our partnership: Since our appointment in 2016, Buchanan has worked with Diversified to create the investment narrative to support its IPO, generating profile in trade and investment media, and advising on the company’s M&A.

Growth story: Diversified has been a real success story since coming to market, raising more than $500m in new equity to pursue its M&A strategy. This included the largest ever acquisition by an AIM listed E&P company, when it acquired $575m of producing assets from EQT Corporation in July 2018.

Hunting

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Our partnership A client of Buchanan’s since 2008, we have advised on material transactions, including the transformative $775m acquisition of Titan in 2011. Hunting is today an industry-leading manufacturer of products associated with well completion, with a particular focus on US shale.

Growth story As a company with exposure to the early cycle of industry investment, Hunting has benefitted strongly from the recovery in global commodity prices, with shares doubling in value between Q4’17 and Q2’18. This made Hunting the best performing company in its European peer group in 2017.

Northbridge Industrial Services

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Our partnership Buchanan has advised Northbridge since its IPO in 2006 and has supported it as it refocuses on core operations, during the significant reduction in the price of oil.

Growth story Since its IPO, Northbridge has made numerous acquisitions and fundraisings. With our support, it’s also successfully dealt with the pressure on its oil services equipment rental operation, caused by the oil price reduction.

Genus

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Our partnership Buchanan has been a trusted adviser to Genus since its IPO in 2000 on AIM. We have evolved Genus’ key message and communications needs in line with its corporate development and globalisation.

Growth story Genus has grown organically and by acquisition from £50m to more than £1.6bn in market capitalisation. Since 2014 alone, Genus has made six acquisitions and invested £100m in R&D, capital expenditure and acquisitions. This has included moving by acquisition into porcine genetics and the launch of a gene editing programme, that seeks to improve animal welfare.

Alliance Pharma

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Our partnership Buchanan has worked closely with Alliance Pharma since 2005, supporting its analyst, investor and media relations and outreach to private shareholders.

Growth story A rapidly growing and dividend-paying company, Alliance Pharma has built its product portfolio and international infrastructure through a series of acquisitions. This included a transformational deal in December 2015, which substantially increased the company’s product portfolio and geographic footprint and has been followed by further exciting product acquisitions. The momentum in Alliance Pharma’s business is reflected in its market capitalisation. This was £80m five years ago, but is now more than £500m.

Keystone Law

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Our partnership Buchanan has supported Keystone Law through the IPO process, fine tuning key messages to communicate the differentiated business model. With a clear equity story, we leveraged our network to achieve supportive coverage across the national and investor media. This included Keystone Law being selected by the Deputy Business Editor at the Evening Standard as his stock tip for 2018.

Growth story Keystone Law is on an exciting journey. Named UK Top 100 challenger law firm, it joined the AIM market in November 2017. The City has recognised the investment opportunity, and with the support of two upgrades from brokers in just the first seven months of public company life, the growth looks set to accelerate.

Anexo Group plc

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Our partnership Buchanan started working with Anexo in early 2018, as it prepared for admission to London’s AIM market. We supported Anexo with financial communications and our in-house design team implemented a thorough brand redesign – including advising on a new name. This meant it had a well-packaged and well-communicated structure ahead of the IPO. We continue to support Anexo’s strategic communications.

Growth story The share price has already increased circa 13% since listing, with strong support from major investors including its two largest holders, AXA and L&G. Anexo has ambitions for further growth, as it looks to expand with new offices throughout the UK, increasing capacity by recruiting new lawyers who want to join the exciting hybrid business.

Telford Homes

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Our partnership With consistent nationwide media coverage, Buchanan has helped Telford Homes establish a reputation as a housebuilder that can stand shoulder to shoulder with its larger sector peers. We are using our strong relationships amongst sell side and media audiences to highlight the fast growth equity story to a wide investor audience. We are also evolving its messaging to establish the business in this exciting sub sector.

Growth story The Company is expected to deliver £50m in pre-tax profits in 2019, representing a 100% increase over four years. It’s now cementing its reputation as one of London’s leading developers in the burgeoning build-to-rent sector.

Watkin Jones

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Our partnership Buchanan advised Watkin Jones through its IPO process, bringing it to the AIM market in March 2016. As the largest AIM fundraise for more than two years, raising £131m, Buchanan leveraged the opportunity to gain widespread coverage of the transaction. We continue to secure ongoing support across the national, investor, regional and trade press.

Growth story Watkin Jones has gained a reputation as one of the AIM market’s best performing shares. It is now well positioned for further growth, as it continues to dominate in two of the strongest sub-sectors in the property market.

Mercia Technologies

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Our partnership Starting in December 2015, Buchanan has worked to improve the rating by increasing interest amongst the retail investor community. Its portfolio companies work in the disruptive technology sectors and our team has successfully increased visibility of these innovative businesses and gained the attention of some of the most influential City journalists. This has resulted in share recommendations in key publications including Mail on Sunday, the Tempus column in The Times and Investors Chronicle.

Growth story Mercia has continued to make strong progress and demonstrate its ability to realise full cash returns above carrying value. With significant investable cash ready to make additional direct investments, it’s primed to move into the next growth phase with an educated, supportive City audience following the equity story.

Frontier Smart Technologies

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Our partnership Buchanan started advising Frontier in 2016, when it was going through an evolutionary period, having sold off a division.In order to clarify the investment case and focus investors on the successful audio assets, Buchanan structured a programme of introductions to tier one small-mid cap sell side analysts, to help gain supporters across the City.

Growth story Through its partnerships with primary market makers, such as Google, Frontier has made first steps in smart audio, with the provision of multi-ecosystem solutions for voice-enabled speakers. It has now turned EBITDA positive and is using the solid cash generation in radio to fund growth in the highly attractive emerging smart audio market.

Pan African Resources

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Our partnership Since Buchanan was appointed in 2017 we have been an indispensable adviser, as the company undergoes a massive restructuring. We have been working very closely on its communications strategy in South Africa, against a backdrop of political and economic challenges, a highly fluctuating currency, and significant labour disputes that have plagued the mining industry during the past decade.

Growth story PAF aims to achieve a re-rating as the changes to the business take effect. The company had two principal mines in South Africa and is now in the process of developing one of the largest tailings retreatment projects in the whole of Africa (Elikhulu).

Kenmare

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Our partnership Buchanan has been a strategic partner to Kenmare for the last six years. Two years ago, we advised it through one of its most serious crises. The price of ilmenite collapsed just at the time the company reached the peak of its debt, nearly bankrupting it.  We assisted Kenmare in a fund raise, which raised almost 10 times its market cap in equity, to pay off debt, and provide much needed working capital.

Growth story Kenmare produces from its Moma mine in Mozambique – a challenging location, where the company prospected for, discovered and is now producing high grade products which are inextricably linked to global GDP growth. It is now thriving with a strong balance sheet, record production, and growing profitability.

Petra Diamonds

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Our partnership Buchanan has been a trusted adviser to Petra on fund raisings of more than $1bn (roughly 50/50 debt/equity) to fund the development of its largest mines.

Growth story As a small AIM listed company, Petra produced from some small fissure mines in South Africa. But in the last five years, it has entered and exited the FTSE 250 index twice, culminating in what was the largest fund raise for a UK listed mining company that month ($178m Rights Issue).

GVC Holdings PLC

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Our partnership Buchanan’s partners have consistently worked with GVC management to promote its investment narrative with appeal to UK and international investors. We have particularly engaged with equity sell side, buy-side and media audiences to drive GVC’s investable profile.

Growth story Initially listed on AIM with a market capitalisation of less than £50m, just four years after our appointment GVC entered the FTSE 100. Having acquired Bwin.Party Digital Entertainment and the eponymous Ladbrokes Coral group, GVC is now the world’s largest stock-market-listed retail and online gaming group.

Recruiting for the Resources team

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We are looking for a talented consultant to join our market leading sector team.

Click here for further details

Buchanan’s mining team head to Indaba

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Yesterday, Buchanan’s mining team kick-started the site visit season ahead of Mining Indaba. Eleven journalists visited Tharisa’s mine in the Bushveld Complex, north of Johannesburg, to see the Platinum Group Metal (PGM) and Chrome mining and production facilities. Over the next three days, Buchanan is supporting further analyst and investor site visits on behalf of three additional clients across South Africa and Mozambique. Bobby Morse, Buchanan’s Senior Partner and Head of Mining, will be attending the second of Tharisa’s site visits, as well as travelling to Petra Diamonds and Pan African Resources, diamond and gold producers respectively. Analysts and investors will be taken to Petra’s Cullinan and Finsch diamond mines, whilst the Pan African Resources agenda includes a trip to its underground operations at Barberton Mines. Also scheduled is a visit to Kenmare’s Moma Mine, on the Mozambican coast, one of the world’s leading producers of titanium dioxide products.

Each visit offers these key stakeholders the opportunity to see first-hand the progress being made on site and aids a more detailed understanding of how each individual mine works.

On Sunday, the team are hosting a cricket match down in Cape Town, alongside Centamin (gold miner) and Numis (institutional stockbrokers and corporate advisors), bringing together corporates and advisors ahead of the Mining Indaba 2018 Conference, which starts on Monday 5 February.

To kick off Buchanan’s activities on the side-lines of Mining Indaba, Augustine Chipungu, Buchanan’s Account Manager is hosting a mining sector focused banking roundtable in the afternoon, and a cocktail reception in the early evening on behalf of Buchanan client, Africa Finance Corporation – the premier multilateral investor with high-profile mining activities across the continent. With both events both twice over-subscribed, Buchanan will be welcoming three dozen c-suite executives, and two mining ministers to these events.

Buchanan supports appScatter Group plc IPO

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Buchanan has provided communications support to appScatter Group plc on its Admission to the AIM market of the London Stock Exchange.

appScatter is a scalable B2B SaaS platform that allows paying users to distribute their apps to, and manage their apps on, multiple app stores. Additionally, the centralised platform enables app developers and publishers to manage and track performance of their own and competing apps across all of the app stores on the platform. The IPO will provide a platform for the Group to execute its strategy for future growth, with the focus on rapidly growing free users and to convert those free users into paying users in order to build critical mass. The Company aims to launch the Marketplace in Q4 2017, targeting an increase in average revenue per paying user by selling add on services, and in addition increasing paying user retention by integrating other business-critical third party products and services with appScatter’s platform.

Smith & Williamson Corporate Finance Limited acted as Nominated Adviser and Joint Broker, Stifel Nicolaus Europe Limited as Lead Bookrunner and Joint Broker, Druces LLP as legal counsel and Buchanan as Financial PR. The Company’s ticker is APPS.

The Buchanan account team was led by Ben Romney, Partner and Giles Sanderson, Deputy Chairman, with additional support provided by Stephanie Watson and Catriona Flint.

Buchanan supports DP Eurasia N.V. IPO

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Buchanan has provided communications support to DP Eurasia N.V. on its Admission to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market of the London Stock Exchange.

DP Eurasia N.V. is the master franchisee of the Domino’s Pizza brand in Turkey, Russia, Azerbaijan and Georgia. The Company, which was founded in Istanbul in 1996, is now the largest pizza delivery company in Turkey and third largest in Russia. It is the fifth largest master franchisee of the Domino’s Pizza brand owned by Domino’s Pizza Inc. The IPO will provide a platform for the Group to execute its strategy for future growth, primarily focusing on innovation and online ordering, and the expansion of its store network, particularly the planned roll-out of corporate stores in Russia.

Morgan Stanley acted as Sponsor, Sole Global Co-ordinator and Joint Bookrunner to the Company and Citi acted as Joint Bookrunner.

Buchanan was retained to advise on the listing and will continue to support DP Eurasia N.V. as a listed Company.  The Buchanan account team was led by Richard Oldworth, Executive Chairman, and Henry Harrison-Topham, Partner, with additional support provided by Victoria Hayns, Madeleine Seacombe and Catriona Flint.