PE Investment in Energy and Mineral Resources Projects

Interview with Zheng Xilin (zhengxilin@anjielaw.com), Chen Bin (chenbin@anjielaw.com)

Q: The general procedure for private equity (PE) investment in energy and mineral resource projects involves what?

A: All different PE organisations have their own particular investment methods and means, however, in my legal service experience, the great majority of PE investments in energy and mineral resource projects take the form of equity investments, and the general procedure is illustrated at the bottom of this page.

If, in the course of the investment process, the inspection or investigation results at the preliminary screening, basic inspection of the project or due diligence stages are unsatisfactory, investment in the project may be foregone.

Q: What are the legal risks involved in PE investments in energy and mineral resource projects?

A: The legal risks attending a PE investment in an energy or mineral resource project come from different quarters, and depending on the specific circumstances of different projects, the legal risks may also be different. However, generally speaking, there a six main kinds of legal risk:

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