reuters

INTERVIEW-IMIC bets on West African promise with more deals ahead
By Stephen Eisenhammer
554 words
7 June 2013
16:09
Reuters News
LBA
English
(c) 2013 Reuters Limited

LONDON, June 7 (Reuters) - IMIC, the infrastructure and mining company which recently made an agreed bid for West Africa-focused miner Afferro, is looking at more investments in the region as it strives to open up a Cameroon export route for iron ore.

"We won't stop at Afferro ... we're looking along the development corridor," Haresh Kanabar, chairman of IMIC, said in an interview on Friday, adding the company had plans to invest in between three and five junior mining companies.

"People did not believe in us, but now we're turning a few heads," Kanabar said.

IMIC has a stock market value of less than $20 million, but its infrastructure deal with the Guinean government to develop a transport route from iron ore deposit Simandou, and its bid for Afferro, have raised its profile.

Infrastructure has emerged as the central obstacle to developing mines in West Africa, with few investors eager to shoulder the costs with commodity prices so fragile.

IMIC, which is allied with African Iron Ore Group, run by Afren Plc founder Bert Cooper, says it is prepared to take on the risks involved.

"Our view is very simple ... Where we believe we can do the infrastructure, we'll take a stake, sometimes 100 percent," Kanabar said.

The company's board includes former cabinet ministers from France and Mauritania, a former president of OPEC and an ex-president of the African Development Bank.

CHINESE PARTNERS

IMIC spent the last three years in China building partnerships which might be bearing fruit.

IMIC's recent takeover target, Afferro, lies on the iron belt between Cameroon and Congo, where a number of other junior companies have deposits, including Sundance and West African Minerals.

Having signed a partnership deal with Chinese state-owned engineering firm CREEC for a port and a railway going through the area, the entire corridor could be opened up.

Kanabar says any railway would be open to other companies to use. Such a line would transform the value of companies there and IMIC is already looking at other targets.

A takeover deal for Sundance by Chinese company Hanlong, which included a proposed railway, fell through in April. IMIC is now talking to some of the company's main shareholders, but no discussions with Sundance's management have taken place.

Some analysts have raised doubts over whether IMIC's bid for Afferro will go through, but IMIC last week bought a further 4.9 percent in the group, raising its voting stake to 9.94 percent. It bought 5.2 million shares at 77.89p, below the 80p cash element of its bid, which also includes a 40p convertible loan.

"We bought it just like that in an afternoon ... that tells you there are sellers at that price," Kanabar said, adding the deal should be done by the end of the month. The transaction would then be completed by the end of August.

If all goes to plan, Kanabar said IMIC could have the railway built and Afferro's flagship iron ore deposit, Nkout, up and producing in five years. "It's all very exciting," he said. (Editing by David Holmes)