Assetinsure issue mining rehabilitation bonds to respective State Governments on behalf of mining companies.
Why Assetinsure! Using a bank? Why? We have a smarter, more capital efficient solution! Want to hear more!?
These bonds are structured such that they enable the mining companies to:
- Comply with current state legislation
- Free up credit lines
- Improve their cash flow and working capital to facilitate growth and investment
Assetinsure is the market-leading bonding provider in Australia and New Zealand and is agent for Swiss Re which has a S&P rating of AA- and APRA approved. Our flexible solutions are expertly tailored to suit most mining rehabilitation bond requirements and we use skilled mining and geology professionals to underwrite the quality of the resource asset as well as to prepare the financial metrics of a prospective client.
The combination of skilled and knowledgeable underwriters, Assetinsure’s extensive Surety industry experience and our thorough yet innovative approach puts us in a strong position to understand the risk of miners and to offer a viable commercial solution to mining firms with sound resource assets.
Our approach has particular relevance to the current resource market, which is facing a number of challenges:
- Volatile commodity prices due to a range of factors including supply/demand issues, geopolitical uncertainty and climate regulation
- Increasing difficulty in securing sources of capital to resource companies, with bank in particular facing increased nervousness around the commodity cycle, as well as heightened political intervention and regulatory pressure on their levels of equity
- Each State in Australia is placing increased focus on the total rehabilitation liability associated with the individual mines
CURRENT LEGISLATIVE REQUIREMENTS
Legislation moving towards requiring a greater level of financial assurance, which means the individual mining companies need increased reserves and capital. In most instances, this is a potentially onerous requirement from a financial perspective and may adversely affect the economic feasibility of the project.
In order to assist companies to comply with individual state legislation in a manner that mitigates the risk of early closure whilst at the same time allowing the company to optimist its cash management and capital strategy, Assetinsure has developed an innovative and flexible mining rehabilitation product that:
- Complies with current state legislation
- Provides the mining company with financial flexibility with less onerous security requirements that banks require
- Most importantly provides the mine to potentially access surplus free cash or cash previously tied up by banks, more cash working for your business and not being unduly held up by banks
- Significant capacities backed by the highly rated Swiss ReinsuranceWe are backed by Swiss Re International SE rated AA- Stable Outlook by Standard and Poor’s and which is regulated by APRA.
- Established track record in providing Surety bondsAssetinsure is a specialist in the Performance bonding market with industry-leading expertise and a strong track record in offering insurance-based corporate finance solutions to the private sector as well as Federal, State and Local Municipalities in the Australian Market.
- Ability to understand and cater for the differing requirementsAssetinsure technical focus on underwriting gives us a competitive advantage in recognising good risks and opportunities, whilst our product flexibility enables us to tailor commercial solutions to suit individual clients from mid-market to major blue-chip mining companies, as well as different State regulatory requirements.
- Skilled teamAssetinsure is a market leader in providing Performance bonds and is backed by a high.ly skilled team of underwriters specialising in geology, mining, legal and financial expertise.
- Flexible structuresAssetinsure will always follow sound risk management principles with regards to the structure of the securities, but we are flexible when it comes to the form and quantum of the collateral security that we take. The overall result creates funding flexibility by not having to use existing banking lines for bonding purposes.
If you would like to learn more about our mining rehabilitation bonds or explore possibilities for security your company’s mining rehabilitation requirements and commitments, please contact:
Direct Line: (08) 9226 1222
Mobile: 0488 154 234
* Financial assurance framework reform Discussion Paper-State of Queensland, 2017