After floating Bateman Litwin NV (AIM:BNLN), and Bateman Engineering NV (AIM:BTE) , businessman and diamond trader Benny Steinmetz is set to float the African copper mine that he owns. Last Monday, Nikanor, which is owned by Steinmetz, Israeli diamond trader Dan Gertler and the Gertner Family Trust, filed papers for an IPO on London’s Alternative Investment Market (AIM). Nikanor aims to raise ₤500 million. Should the Nikanor float proceed as planned, it will be one the biggest IPOs ever carried out on AIM.
Nikanor is the holding company of a group of companies (“Nikanor Group”) with copper and cobalt mining assets located in the Democratic Republic of Congo (DRC) held through a 75% subsidiary which is governed by a joint venture agreement with Gecamines, a DRC state-owned company.
The company’s announcement reveals that Gertner holds a 50% stake (through BSG Resources Limited registered in the name of Oakey Invest Holdings Inc.), while Dan Gertler holds a 20% share and the Gertner Family Trust (registered in the name of Pitchley Properties Ltd.) holds 30%. The underwriter for the IPO is investment bank JP Morgan Chase and Co. (NYSE: JPM). Trading will commence in two weeks time on July 19, with Nikanor likely to begin the road show ahead of the float in the coming days. Steimetz, incidentally, is currently in Berlin.
As with the other companies he controls, Steimetz does not serve on the Nikanor board. The company’s chairman is Jonathan Leslie, former copper division manager at Rio Tinto, one of the largest mining companies in the world. The Nikanor board also includes former US ambassador to Israel Dan Kurtzer.
Nikanor’s central business activity will involve the re-development of the KOV mine (“KOV”), a brownfield open pit mine situated near the town of Kolwezi, in the copperbelt of the Katanga province (in the south east of the DRC). The directors believe that KOV contains one of the highest grade major ore bodies of copper in the world with 172 million tones of indicated mineral resources at grades of 5.09% copper and 0.49% cobalt. KOV was a producing copper mine from 1960 until production ceased in 2000 due to the lack of re-investment.
Following successful re-development of its assets, Nikanor intends to produce approximately 250,000 tonnes per annum of LME grade A copper and around 25,000 tonnes per annum of marketable, high purity cobalt products. In addition to KOV, Nikanor also intends to develop and mine in the nearer term two sizeable open pit mines, Tilwezembe and Kananga, situated in the same area. Both contain high grade cobalt deposits with significant copper content, and mining is expected to commence later in 2006 and during the second half of 2007 for Tilwezembe and Kananga respectively.
Steinmetz’s timing of the Nikanor IPO was not coincidental. Prices of copper, the main export from the DRC, have doubled over the past year.
Published by Globes [online], Israel business news - www.globes.co.il - on July 5, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006