#Qatar’s QIA Takes $500 Million Stake in Copper Miner Ivanhoe - Bloomberg

Qatar’s QIA Takes $500 Million Stake in Copper Miner Ivanhoe - Bloomberg

Qatar’s sovereign wealth fund will acquire a $500 million stake in copper producer Ivanhoe Mines Ltd., deepening its push into the global mining industry.

The Qatar Investment Authority — which oversees $524 billion — will take on the shares via a private placement, giving it a 4% stake in the Canadian miner, Ivanhoe and the QIA said in a joint statement on Wednesday. Bloomberg reported earlier that the fund was close to a deal to acquire a minority holding.

The investment in Ivanhoe is one of the QIA’s largest forays into the mining industry since it purchased a stake in Glencore Plc several years ago. Under newly appointed Chief Executive Officer Mohammed Al Sowaidi, the wealth fund is expected to more aggressively deploy the billions of dollars it’s likely to receive from an expansion of the country’s gas projects.

Ivanhoe, run by billionaire Robert Friedland, operates the Kamoa-Kakula complex in the Democratic Republic of Congo, one of the world’s top sources of copper. That flagship project was hit by a major setback earlier this year, after seismic activity triggered flooding that forced the company to slash its full-year output guidance.

The private placement will be priced at C$12 a share, a 9% discount to Ivanhoe’s closing share price in Toronto on Tuesday. On Wednesday, the stock swung between gains and losses and traded 1.3% higher at C$13.36 as of 11:21 a.m. local time.

The shares are down more than 20% this year, giving Ivanhoe a market value of about C$18 billion ($13 billion) despite a 14% lift in copper prices over the same period.

On closing, the QIA and Ivanhoe will enter into an investor agreement that would give the fund the right to board representation if its holding rises above 10%. The pair also intend to collaborate on further strategic partnerships, they said.

“This strategic investment reflects QIA’s conviction not only in Ivanhoe Mines’ world-class portfolio of tier-one assets, but more importantly, in supporting its team in finding, developing, and sustainably supplying the critical minerals essential to the global energy transition and advanced technology applications,” Al Sowaidi said in the statement.

The QIA plans to deploy an additional $500 billion in the US over the next decade, Al Sowaidi said in an interview in May. That echoes the US-focused investment strategy that some of its Gulf peers such as the Saudi Arabia’s Public Investment Fund and state-owned entities in the United Arab Emirates have embarked on.

Ivanhoe is already backed by Chinese investors, counting CITIC Metal as its largest shareholder. Zijin Mining Group Co. also has a major stake. They both have the right to buy additional shares at the same price as the QIA to avoid dilution of their holdings, according to the statement.

The share count would increase by as much as 6.5% if CITIC and Zijin exercise their anti-dilution rights versus about 4% with QIA only, Jefferies analysts Fahad Tariq and David Hove wrote in a note to clients.