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INTERVIEW-Australia's EMR Capital raises $450 mln for private mining fund
February 2, 2015 / 6:51 AM / in 3 years

INTERVIEW-Australia's EMR Capital raises $450 mln for private mining fund

* EMR Capital fund targets copper, gold, coking coal, potash

* Low commodities prices creating opportunities

* Fund oversubscribed by $50 million

By James Regan

SYDNEY, Feb 2 (Reuters) - Australia-based private equity group EMR Capital on Monday closed off a specialist mining fund after securing a bigger-than-expected $450 million in commitments, saying spiraling commodity markets were creating opportunities in the sector.

EMR Chief Executive Jason Chang said the fund will focus on copper, gold, coking coal and the fertiliser potash, and had attracted a mix of institutions, endowments and private investors.

“We think now is a good time to deploy capital into these markets,” Chang told Reuters in an interview. “We’re looking at the medium to long term and not worried about the day-to-day fluctuations.”

The rout in commodities was paving the way for more private equity to replace public capital raisings, which have largely dried up since the collapse of the mining boom, Chang said.

Big name funds that dominate the $2.5 trillion private equity industry generally steer clear of mining, which they view as too risky. But a clutch of specialist funds estimated to have at least $10 billion to spend are prowling for opportunities around the world.

“If you use Australia as a proxy, the mining sector has come off more 30 percent but the non-mining sector has improved more than 25 percent and that’s making it hard for mining companies to tap into public markets at this point,” Chang said. “For that reason, you are going to see more private equity going into mining.”

EMR’s new fund, which initially had a target of $400 million, will likely avoid investing in iron ore, where prices have tumbled more than 50 percent in the last year and supply is dominated by a small handful of miners led by Vale, Rio Tinto and BHP Billiton , according to Chang.

“Iron ore is probably too much of a niche market,” he said. (Editing by Stephen Coates)

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