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VANCOUVER—Robert Friedland, the billionaire who spent the past decade building a $6 billion (U.S.) copper mine in Mongolia’s Gobi Desert, is asking investors to fund projects in an even riskier locale—the Democratic Republic of Congo.
Ivanplats Ltd., a Friedland-controlled mining company, plans to raise about $300 million (Canadian) in an initial public offering in Toronto, according to a person with knowledge of the IPO who declined to be identified because the amount hasn’t been published. Vancouver-based Ivanplats seeks funding for its Kamoa copper project in Congo and to repay debt owed to Israeli investor Dan Gertler, who sold the company a zinc mine in the African country last year, according to a prospectus filed with regulators Sept. 10.
Friedland, 62, five months ago lost control of the Oyu Tolgoi mine in Mongolia after disputes with the government and joint venture partner Rio Tinto Group. He’s now proposing a mining development in Congo, whose government seized copper assets from Canada’s First Quantum Minerals Ltd. in 2010, and in South Africa, where the mining industry is convulsed by labor unrest.
“I would call the DRC the ultimate high-risk, high-reward mining destination—it’s one that’s on the radar of all serious mining companies because of its huge wealth and mineral resources,” James Smither, head of the mining practice at Maplecroft, a Bath, England-based risk-analysis company, said by telephone.
“With that comes a significant array of potential pitfalls ranging from political uncertainty to contractual variances and very significant security challenges,” he said.
A $300 million share sale would be the third-largest Canadian mining IPO since at least 1999, according to data compiled by Bloomberg. Franco-Nevada Corp. raised $1.26 billion in a 2007 offering while Tahoe Resources Inc. sold $365.4 million of stock in 2010.
Friedland had planned to sell as much as $1 billion of Ivanplats shares, people with knowledge of the situation said in mid-January. Since then, China’s economy has slowed and Europe’s sovereign debt crisis remains unresolved.
Ivanplats’ board of directors includes Cyril Ramaphosa, chairman of South Africa’s Shanduka Group Ltd., and Marc Faber, author of the Gloom, Boom& Doom report, the prospectus shows. Lars-Eric Johansson is chief executive officer.
Bank of Montreal is leading a group of underwriters including Morgan Stanley, Macquarie Group Ltd. and Royal Bank of Canada, according to the document.
Friedland, who lives in Singapore and has a net worth estimated by Forbes at $2.3 billion (U.S.), wasn’t immediately available for comment, according to a spokesman.
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