Exploration needs political backing

In the Handelsblatt newspaper, the VBGU, together with the Federation of German Industries (BDI) and the German Chamber of Industry and Commerce (DIHK), calls for financial support for the early development phases of mining companies.

The existing KfW Raw Materials Fund can currently only support projects that demonstrate technical and economic feasibility. This means that projects must already be at a very mature stage in order to qualify for KfW financing. The entire preliminary phase up to the final feasibility study (DFS) is therefore left to private investors. However, it can take several years before a DFS is available. This so-called preliminary phase of the project up to the DFS should be supported by a separate funding fund.

This funding fund could, for example, consist of private capital and, to a lesser extent, government funds. With professional capital management, bad investments can be offset and returns generated. Small-scale financing structures (20, 15, 10 M €) would help exploration projects in the initial phase to reach the final feasibility study stage. Such a fund can thus achieve a large leverage effect with few financial resources.

Alternatively, a funding programme for German and European exploration projects could also be set up.