The mining sector could bring a flurry of IPOs to London and elsewhere in the second half of 2012 after several lean years for investors and bankers, as miners eye deals or seek to raise funds for increasingly costly projects. The IPO waiting list is building for all sectors, banking and industry sources say, and from large to small caps, after many were shelved in the turbulence of the last few years.
London in particular has a pipeline that is at its strongest since the global crisis, according to the London Stock Exchange. Some of the more eye-catching listings may come from the mining sector, with billionaire Robert Friedland set to lead the charge with Ivanplats, a listing that could raise as much as $1 billion and value the mining and exploration company at around $5 billion, according to sources familiar with the matter.
It would be the first major test of market appetite for mining stocks since trader Glencore listed last year.
"There has been a famine and there is a glut of things to come," said one of the sources involved in the listing.
"Ivanplats could be the catalyst for it all happening, especially if they price it to go." Ivanplats could be the first major mining listing out of the starting blocks this year, expected to list in Toronto as early as May or June before heading to London, possibly later this year. Friedland's latest venture is likely to be a test for investor appetite for mining, but also for country risk, an increasingly prevalent reality for miners seeking new deposits.
Ivanplats' major assets include the Kamoa copper deposit in the Democratic Republic of Congo, the most significant discovery in the country since the Belgian colonial period, and the giant Platreef platinum-nickel-palladium project in South Africa.
"It will be a huge litmus test for the market," analyst Andy Davidson at Numis in London said. "We haven't had a really big listing since Glencore and the fact that it is in the DRC will make it doubly interesting. If it is priced appropriately there will be appetite... this is clearly a world class asset."
Other big-name debuts in the wings in London include the mining subsidiary of Grupo Mexico, with a listing worth some $5 to $6 billion, and Brazilian iron ore miner Ferrous Resources, which could consider another tilt at the market later this year, a source familiar with the matter said.
Ferrous, forced to delay plans for a market debut in 2008, has faced tough markets and ambitious valuations, and again in 2010 shelved a listing plan which had been expected to value the miner at over $3.5 billion, citing difficult conditions.
It has since been seeking a strategic partner, but Ferrous' new chief executive said last month he would reconsider IPO plans and could take advantage of a "favourable window."