Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Indonesian copper miner Amman Mineral Internasional aims to raise up to 12.94 trillion rupiah ($880.6 million) in a listing scheduled for June 28 to July 3, it said in its prospectus on Wednesday.
The listing would be the biggest initial public offering (IPO) in Southeast Asia this year, according to Refinitiv data, surpassing the listing of Indonesian nickel producer Trimegah Bangun Persada, known as Harita Nickel, that raised 10 trillion rupiah in April.
Indonesia’s IPO market is one of the world’s hottest this year. First-time share sales have raised $1.58 billion as of April, second only to China in the Asia-Pacific region excluding Japan and ahead of traditional powerhouse Hong Kong, according to Refinitiv data.
The announcement of the Amman Mineral IPO comes a day after agri-food giant Olam Group said it did not expect the dual listing of its agricultural unit, Olam Agri, in Singapore and Saudi Arabia to be completed in the first half of this year as originally planned, citing failure to obtain “all the necessary regulatory approvals”.
Amman Mineral’s prospectus showed book building is set to start on Wednesday with an offering price in a range of 1,650 rupiah to 1,775 rupiah per share.
The Jakarta-headquarted company will use IPO proceeds to pay off some debt and fund several projects, including completing a copper smelter it is building in Sumbawa island, it said in its prospectus.
The smelter, which has input capacity of 900,000 tonnes of copper concentrate to produce 220,000 tonnes of copper cathode annually, will cost the company $983 million in total, company and government data showed.
The Indonesian government in April exempted Amman until May 2024 from a planned June ban on raw mineral exports, to give the firm a revenue stream to complete the smelter project, which was half-finished as of January.
A unit of Amman Mineral, part of Indonesian energy group Medco Energi Internasional, operates the Batu Hijau mine in the West Nusa Tenggara province.
Amman Mineral Internasional acquired the Batu Hijau mine from US miner Newmont Mining Corp and Japan’s Sumitomo Corp and its partners in 2016.
A strong market debut by Amman Mineral on July 5 could boost sentiment for upcoming IPOs in Indonesia this year.
They include Pertamina Hulu Energi, the upstream arm of Pertamina, that could raise at least 20 trillion rupiah, and state-owned fertilizer company Pupuk Kalimantan Timur that could raise $500 million.
($1 = 14,695.0000 rupiah)
(By Fransiska Nangoy, Bernadette Christina, Ananda Teresia and Yantoultra Ngui; Editing by Tom Hogue and Kanupriya Kapoor)
Comments