Deals



Chinalco Mining Corporation IPO


Posted: 16th April 2013 09:10

Chinalco Mining Corporation International (“CMC”) has raised approximately $400 million in an initial public offering in Hong Kong.
 
The unit of China’s biggest aluminium producer sold about 1.76 billion shares at HK$1.75 apiece.  The shares were offered at HK$1.52 to HK$1.91 each, according to a prospectus for the IPO.  The IPO is the largest first-time share sale by a mining company in Hong Kong since Inner Mongolia Yitai Coal Co.  (900948)’s $903 million offering in July 2012. 
 
CMC is a resource development company acting as Chinalco’s core platform for the future acquisition, investment, development and operation of non-ferrous and non-aluminium mineral resources and projects overseas.  Their controlling shareholder, Chinalco, is a Fortune Global 500 company since 2008, and a leading metals and mining conglomerate based in China.
 
Currently, the Group is focusing on developing the Toromocho Project, which is located in central Peru in the core of the Morococha mining district.  According to Behre Dolbear Report, the proved and probable JORC-compliant reserves of the Toromocho Project deposit are estimated to contain approximately 7.3 million tonnes of copper, 290,000 tonnes of molybdenum and 10,500 tonnes of silver. 
 
It is expected to commence production during the fourth quarter of 2013 and reach full production capacity in the third quarter of 2014.  It is estimated that the Toromocho Project can produce ores for 32 years and thus has an estimated mine life of 32 years.  Upon commencement of commercial production, the Group plans to process the copper sulphide ores on-site and sell the copper concentrates primarily to China for smelting and production of refined copper. 
 
Chinalco Mining is raising funds with the Bloomberg World Mining Index down about 7.4 percent in the past year amid expectations of slowing growth in China, the world’s largest consumer of copper and iron ore.  The company sold $240 million of shares, or more than half the total, to five cornerstone investors, including Rio Tinto Group (RIO) and Trafigura Beheer BV, the prospectus shows.
 
Rafael Alcázar and Carlos Granda, attorneys at Rebaza, Alcázar & De Las Casas Abogados Financieros were responsible for the transaction.  Rebaza & Alcázar is a blue-chip firm that operates atop the corporate finance deal-making market in Peru.  The firm ranks consistently as a top-notch to-go spot for M&A and complex capital market and lending financings and project financings, and holds the leading practice in the area of restructuring, insolvency and acquisition of distressed assets.  In recent years the firm has gained considerable breadth in mining deal making, which has transpired into a thriving practice group specialised in the mining industry. 









Advisor to Chinalco Mining Corporation International
Senior Partner Rafael Alcázarcommented:
“This deal proves once again the ever increasing interest of Asian investors in Peruvian Companies specifically in the ones in the mining sector.  The Toromocho Project is expected to become the second largest copper producer in the world and will contribute to the consolidation of Peru as a first-class copper producer.” 
Mr. Alcázar can be contacted on +511 442 5100 or by email at rafael.alcazar@rebaza-alcazar.com
Advisor to Chinalco Mining Corporation International
Senior Associate Carlos Granda commented:
“The deal posed the challenge of working intensely for more than a year with the many Hong Kong counterparties, particularly with the Hong Kong Stock Exchange, to, amongst others aspects, explain the complex Toromocho mining project -a first from Peru to be financed through the Hong Kong capital markets-, specially its resettlement related aspects, in a way that apart from technically correct also had to be palatable for the investors in the Hong Kong market.”
Mr. Granda can be contacted on +511 442 5100 ext 243 or by email at carlos.granda@rebaza-alcazar.com

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