No use for banks to support their mining clients only during good times
“Because of our history as a mining bank and our enduring expertise in this sector, we work to understand our clients’ individual requirements. Like many large investment banks, we work with government, corporates and financial clients in multiple sectors and geographies,” said Standard Bank’s Client Coverage Manager, Stefan Wandrag explaining their relationship with clients in the extractive sector.
“Our track record shows our success in building businesses across Namibia, especially in the natural resources, mining, power and infrastructure sectors,” he said after the bank’s participation in the recent Mining Expo.
With a specific focus on the mining and metals industry, the bank employs various industry experts, not only locally, but also with a view to the southern African region as a whole.
One of the highlights of the bank’s involvement in mining to date is their role as co-financier of De Beers Marine’s new exploration and mining vessels. Another is their relationship with Lewcor Mining, and extensive group that provides excavation services to existing gold and copper mines.
According to Wandrag, banks had to revisit the ways in which they conduct business and had to become equally resilient. There has been a huge amount of pressure, even on multinational mines which has forced banks to redefine the way they partner with clients.
However, he continued, it is imperative to bear in mind that mining is a cyclical industry which is affected by various variables. “There are peaks and there are troughs. It is important that banks partner with a client they understand. This, without a doubt, necessitates a transparent banker-client relationship in which both partners are open and frank with one another. “You have to support them for the long term, during both the high tides as well as the difficult times,” he said.
He explained that this is because the bank attaches a high premium to a deepened relationship with clients in the commodity space, one that will stand the test of time. Such a relationship also helps them to appreciate and be mindful of the complexity of the world the client operates in.
It is important that banking relationships in mining endure during the good times as well as during economically challenging periods when clients are often forced to reduce production costs without harming production volumes.