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To: Crimson Ghost who wrote (64105)	2/21/2001 6:06:23 AM
From: sea_urchin	Respond to of 116927

George: Re : Forward selling by mines This article appeared in this morning's paper : bday.co.za While the piece concerns the new SA mineral's Bill, it shows why forward selling is now so popular. The reason is clearly finance. The article shows that mineral rights in Australia, Canada, and soon SA, will not be an asset (collateral) against which companies can obtain loans. So, they have no choice but to sell their future production forward in order to obtain the necessary finance to develop their mine. "When providing financial services to mining companies, financial organisations have traditionally done so when the mineral rights are used as security for the deal," Louw said. "However, in terms of the proposed legislation, in the event of a mining concern being liquidated, the mineral rights revert to the state. This leaves financial institutions with few options to obtain security when providing financing for mining deals."