Investment Strategies And Countermeasures In Mining Sector Research Of Private Equity Fund

Base on related theories and practices of private equity and capital market in mining sector, thisresearch analyzed the investment strategies and countermeasures of private equity investmentfrom the angles of exploration and exploitation. Two aspects are included in this paper: on themacroscopic level, author considered the problems in Chinese mining private equity developmentand how to solve these issues; on the other hand, this study pointed out that what factors should beconsidered, what strategies should be made and what countermeasures should be adopted byinvestors in the private equity investment activities. In this paper, author used case study as themajor research method to research and analyze two overseas primary exploration companiesdeeply and wrote the original cases.These original cases bring the reader three major enlightenments, 1) same as the senior employs inhigh-tech industry, geologists and relevant professionals could relay on capital market totransform their knowledge to wealth, but they need change their original senses; 2) in the processof knowledge to wealth, successes need four basic important factors: appropriate explorationprojects, experienced management team, institutional investors and primary exploration companystock market; 3) the primary exploration companies and their management teams should learnhow to manage risks and establish the investment portfolios.Base on the analysis of cases, this study advised private equity investors in mining sector shouldchange their concepts and pay attention on four points when they are investing on mineralsprospecting and development. 1) in the invest activities, the investees is"exploration company"(project+ management team), not"mine", investors should pay more attention on"knowledge"and"human capital".2) when private equity investors in mining sector make the reasonable investstrategy, they should understand the combination of finance and mining prospecting which isproject + management team + exploration and development business plan. 3) Private equity investors should have a good knowledge on domestic and overseas mining capital and stockmarket and understand how to use them.4) during the private equity investment process in miningsector, should change the idea from resources-oriented to capital market-oriented.In the end, this study from the macro management angle, pointed out five countermeasures andsuggestions on how to develop Chinese private equity investment in mineral resources explorationand exploitation industry. Establish interdiscipline to educate the interdisciplinary talents; set upgeologist system as soon as possible; set up the government guide fund to support private equity toinvest mining; further perfect Chinese mining capital market; encourage mining state-ownedenterprises cooperate with private equity investment institutions.