Project finance in the mining sector was significantly affected by the downturn in 2009, leaving miners to deal in an environment of excessively high risk, according to a report by Ernst & Young.

It also warns that the impact of the financial crisis is unlikely to be understood for years.

The report, 2009: The Year of Survival and Revival, reveals that only ten deals reached financial closure in 2009 compared to 16 the previous year.

The projects financed in 2009 were also much smaller in scale, exempting Antofagasta’s Minerva Experanza project, valued at over $1bn.

Last year project financing was valued at $5.4bn, down from $7.7bn in 2008.

Traditional South American mining and metals nations played a leading role in 2009 when it came to the financing deals that were closed.