China gets firmer grip on Ivanhoe Mines by increasing stake

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Zijin, one of China’s largest mining groups, is increasing its stake in Canada’s Ivanhoe Mines (TSX:IVN) to 13.88% from 9.8% by acquiring 35.7 million shares from CITIC Metal and 12.9 million shares from founder Robert Friedland for about C$194 million ($146m).

The move means that Friedland’s interest in the company has shrank
to 13.2% of, leaving the two Chinese companies as main shareholders.

Zijin, China’s No.1 gold producer and Ivanhoe’s partner in the massive Kamoa-Kakula copper deposit in the DRC, first acquired a stake in the Vancouver-based miner in 2015.

Deal ups Zijin’s stake to 13.88% from 9.8% and reduces Friedland’s to 13.2%, leaving two Chinese companies as the Canadian miner’s top shareholders.

Citic Metal followed suit last year, becoming Ivanhoe’s largest shareholder. Its ownership which will fall to 26.4% with today’s transaction.

The combined funds from the two Chinese companies, the Vancouver-based miner said at the time, are enough to allow it finance Kakula and Kipushi mines to commercial production, and significantly advance, or achieve, production at the company’s Platreef project in South Africa

Friedland, who made his fortune from the Voisey’s Bay nickel
project in Canada in the 1990s, has been working on Kamoa-Kakula for ten
years.

The mining legend has repeatedly stated that the project, in
which Zijin owns a 36.9% direct interest, is set to become the world’s
second-largest copper mine.

According to an independent pre-feasibility study
(PFS) released in February, the operation is expected to reach
peak annual production of more than 700,000 tonnes of copper.

Initial production from the Kakula mine, the first of at
least three copper mines planned at Kamoa-Kakula, is scheduled for late 2021.

Reshuffle

Ivanhoe also said on Tuesday that I had appointed Mark
Farren as its Kamoa-Kakula Copper joint venture (JV) chief executive. Farren
was previously Ivanhoe executive VP of operations.

Zijin’s Yong Chen, in turn, will assuming the chief of operations
officer (COO) position.

South African mining veteran Warwick Morley-Jepson has
been appointed Ivanhoe’s new COO, taking over the duties formerly held by
Farren.