Nikanor plc

Nikanor plc was an Isle of Man-registered mining holding company created to hold interests in copper and cobalt projects in Katanga Province, in the Democratic Republic of the Congo (DRC). Its principal asset exposure came through Global Enterprises Corporate (GEC), a company associated with Dan Gertler and Beny Steinmetz, and the DRC Copper and Cobalt Project (DCP). The portfolio centered on the KOV project, or Komoto Oliveira Virgule, a large open-cast copper-cobalt complex comprising the Tilwezembe and Kananga deposits and the Kolwezi concentrator. The commercial background to Nikanor lay in a 2004 joint venture between GEC and the DRC state mining company La Générale des Carrières et des Mines, commonly known as Gécamines. The arrangement contemplated the rehabilitation and operation of the Kananga and Tilwezembe mines and the development of processing capacity in the Copperbelt. The resulting DCP structure was intended to be 75% owned by GEC and 25% by Gécamines. Exploitation permits for the relevant assets were transferred to DCP, while GEC's interest in KOV was subsequently placed into Nikanor. Nikanor was incorporated in 2006 and listed on the London Stock Exchange's Alternative Investment Market in July of that year. Its initial public offering raised approximately US$400 million, and contemporary descriptions placed its market capitalization at about US$1.5 billion at the time of flotation. The company used public-market capital to advance a major redevelopment program in the DRC. A feasibility study by Bateman Engineering later indicated that the projected cost of rehabilitating KOV had increased substantially, placing pressure on the company's financing requirements and market valuation. In 2007, Nikanor entered a period of financing activity, strategic partnership, and ownership conflict. It sought additional capital for the KOV development and announced a placing of new shares managed by RP Capital. Glencore agreed to subscribe for part of the new issue and obtained rights to purchase Nikanor's copper and cobalt production under an offtake arrangement. Dan Gertler, Beny Steinmetz, and associated entities also pursued a takeover proposal through the Cosaf consortium. The proposal was controversial among shareholders who were not participants in the bidding group and was presented at approximately the company's flotation price. Nikanor's independent existence ended in January 2008, when it was merged into Katanga Mining Limited. Katanga paid approximately US$452 million to Nikanor shareholders. The transaction formed part of a broader attempt to consolidate mining operations in the Zambian–DRC Copperbelt and combined Nikanor's project interests with Katanga's neighboring assets. After the merger, the Nikanor name ceased to represent a separately listed operating company. Later reporting on Katanga described the continuing influence of Glencore and Dan Gertler in the combined mining structure and discussed subsequent transactions involving DRC mining assets. Nikanor therefore represents a short-lived public mining vehicle rather than a consumer-facing brand. Its significance rests on the way it assembled DRC copper-cobalt assets, raised international equity capital, attracted commodity-trading and private-investment partners, and was then absorbed by a larger mining company. The company is now defunct as an independent entity, with its corporate and asset history principally connected to GEC, DCP, KOV, Katanga Mining, and the wider DRC Copperbelt.

Nikanor's history began with the formation of Global Enterprises Corporate and its negotiations with Gécamines, the DRC's state mining company. In 2004, GEC signed a preliminary arrangement with Gécamines and later entered a joint venture covering the Kananga and Tilwezembe mines. The agreement, ratified by presidential decree, provided for a 75% GEC interest and a 25% Gécamines interest. GEC undertook to invest in processing infrastructure, including a proposed leaching plant, with the objective of restoring production from assets in the Katanga Copperbelt. The project was reorganized through the DRC Copper and Cobalt Project, a subsidiary holding the relevant permits and assets. The principal development area was KOV, an open-cast copper-cobalt project incorporating the Tilwezembe and Kananga deposits and the Kolwezi concentrator. In 2006, GEC's interest in KOV was placed into Nikanor plc, creating a public vehicle through which international investors could finance the redevelopment of the assets. Nikanor was incorporated in 2006 with its registered office in Douglas, Isle of Man. It obtained a London listing on AIM in July 2006. The flotation raised approximately US$400 million and gave the company a reported market capitalization of roughly US$1.5 billion. Nikanor's strategy was based on restoring underused or derelict mining and processing assets and participating in the consolidation of businesses operating across the Zambian–DRC Copperbelt. The project encountered rising development costs and increasing capital requirements. A feasibility study prepared by Bateman Engineering raised the estimated rehabilitation cost for KOV from approximately US$1.3 billion to approximately US$1.6 billion. By spring 2007, the first development stage and the wider funding requirement were both described as substantial, while Nikanor's market capitalization had declined from its level at flotation. The company consequently explored further equity and other financing options. In 2007, Nikanor arranged a share placement managed by RP Capital. Glencore subscribed for part of the new issue and negotiated an offtake arrangement covering the project's copper and cobalt production. At the same time, Beny Steinmetz, Dan Gertler, and associated entities pursued a hostile bid through the Cosaf consortium. The bid valued the shares at approximately £6 each, corresponding to the flotation price, and was resisted by shareholders not involved in the consortium. Nikanor's independent corporate life ended in January 2008, when Katanga Mining acquired or merged with the company for approximately US$452 million in cash consideration to Nikanor shareholders. The transaction combined Nikanor's DRC project exposure with Katanga's neighboring operations and reflected a broader consolidation trend in the Copperbelt. Nikanor was thereafter no longer a separately listed company. Subsequent reporting focused on the ownership, financing, offtake, and asset relationships surrounding Katanga Mining, Glencore, and Dan Gertler, rather than on Nikanor as an operating brand.

• 2008

  Acquisition by Katanga Mining

  [1]Nikanor plcen.wikipedia.org

  Katanga Mining acquired Nikanor for approximately US$452 million, ending its separate corporate and stock-market identity.

• 2007

  Financing and offtake partnership with Glencore

  [1]Nikanor plcen.wikipedia.org

  Nikanor announced a major share placement, with Glencore subscribing for part of the issue and agreeing to purchase the project's copper and cobalt output.

• 2007

  Hostile takeover proposal

  [1]Nikanor plcen.wikipedia.org

  The Cosaf consortium, involving key existing stakeholders and financial partners, proposed acquiring Nikanor over the objections of other shareholders.

• 2006

  Nikanor plc is incorporated and listed on AIM

  [1]Nikanor plcen.wikipedia.org

  Nikanor was incorporated in the Isle of Man and listed on the London Stock Exchange Alternative Investment Market in July.

• 2004

  GEC signs mining joint-venture agreement with Gécamines

  [1]Nikanor plcen.wikipedia.org

  GEC and Gécamines agreed to cooperate on rehabilitating and operating the Kananga and Tilwezembe mines, with GEC holding 75% and Gécamines 25%.

A publicly listed development and holding vehicle for major copper-cobalt assets in the DRC, positioned around the redevelopment and consolidation of Copperbelt mining infrastructure.

• Copper-cobalt mining project

  KOV (Komoto Oliveira Virgule)

  KOV was Nikanor's principal mining development asset in Katanga Province. It was described as a large open-cast copper-cobalt project comprising the Tilwezembe and Kananga deposits together with the Kolwezi concentrator. The project required extensive rehabilitation and new processing investment and was intended to restore significant copper and cobalt production in the DRC Copperbelt.

• Copper-cobalt deposit

  Tilwezembe deposit

  Tilwezembe was one of the deposits included in the KOV project and in the GEC–Gécamines development structure. Nikanor's strategy treated it as part of an integrated mining and processing complex rather than as a standalone consumer or commercial product.

• Copper-cobalt deposit

  Kananga deposit

  Kananga was the second principal deposit in the KOV development area and was covered by the GEC–Gécamines joint venture.

• Mineral-processing facility

  Kolwezi concentrator

  The Kolwezi concentrator formed part of the KOV asset package. It was intended to support the concentration and processing of ore from the associated copper-cobalt deposits as part of the wider rehabilitation and expansion program.

• 2007

  Controversy surrounding DRC mining concessions and stakeholder relationships

  Contemporary reporting and later accounts raised questions about the political relationships, concession arrangements, ownership links, and commercial partnerships surrounding GEC, Nikanor, Dan Gertler, and DRC government-connected figures. The material describes allegations and controversy rather than establishing a formal finding against Nikanor itself.

  Source

Read more

• 2008

  Merge with Katanga MiningM&A

  Background

  Nikanor's project interests were adjacent to Katanga Mining's DRC operations, creating a rationale for corporate and asset consolidation.

  Action taken

  Katanga Mining acquired Nikanor and paid cash consideration to Nikanor shareholders.

  Aftermath

  Nikanor ceased to operate as a separate listed company and its assets became part of the combined Katanga Mining structure.

  Acquisition consideration. Approximately US$452 million (January 2008)

  Source

• 2007

  Raise additional capital and secure production offtakeOther

  Background

  Higher rehabilitation costs and the capital intensity of KOV increased Nikanor's funding requirements.

  Action taken

  Nikanor announced a share placement managed by RP Capital, with Glencore subscribing for part of the new shares and agreeing to purchase the project's copper and cobalt output.

  Aftermath

  The financing strengthened Glencore's commercial connection to the project while contributing to a wider contest for control of Nikanor.

  Share placement. Approximately £372 million announced (June 2007)

  Source

• 2006

  Place GEC's KOV interest into a public companyStrategy

  Background

  The sponsors sought international capital to develop the KOV copper-cobalt assets in the DRC.

  Action taken

  GEC's 75% interest in KOV was placed into Nikanor plc, which was incorporated and listed on AIM.

  Aftermath

  Nikanor became the public-market vehicle for financing the project and attracted major commodity and private-investment partners.

  IPO proceeds. Approximately US$400 million raised (July 2006)

  Source

• 2004

  Create a GEC–Gécamines copper-cobalt joint ventureStrategy

  Background

  GEC sought to rehabilitate copper and cobalt mines and processing infrastructure in Katanga through an arrangement with the DRC's state mining company.

  Action taken

  The parties established a structure in which GEC held 75% and Gécamines held 25%, with GEC responsible for substantial proposed investment.

  Aftermath

  The assets and permits were later organized through DCP and became the foundation of Nikanor's KOV exposure.

  Proposed investment in new leaching and related processing capacity. US$300–400 million proposed (2004)

  Source

• 2011

  Reporting examines Glencore and Dan Gertler's role in Nikanor and Katanga Mining[2]The biggest company you never heard ofreuters.com

  Other

  Reuters described the commercial relationship between Glencore and Dan Gertler in connection with Nikanor and its eventual combination with Katanga Mining.

• 2008

  Nikanor merges into Katanga Mining[1]Nikanor plcen.wikipedia.org

  M&A

  Katanga Mining Limited acquired Nikanor in a transaction valued at approximately US$452 million, ending Nikanor's existence as a separate public company.

• 2007

  KOV redevelopment costs increase[1]Nikanor plcen.wikipedia.org

  Other · Pricing

  A Bateman Engineering feasibility study indicated that the projected cost of rehabilitating the KOV project had risen materially, increasing the company's financing needs.

• 2007

  Glencore takes part in Nikanor financing and secures offtake rights[1]Nikanor plcen.wikipedia.org

  M&A · Other

  Glencore agreed to purchase part of Nikanor's newly issued shares and obtained rights to buy the copper and cobalt produced by the company's DRC project.

• 2007

  Consortium launches hostile takeover bid for Nikanor[1]Nikanor plcen.wikipedia.org

  M&A

  Beny Steinmetz, Dan Gertler, and related stakeholders launched a takeover proposal through the Cosaf consortium. Shareholders outside the bidding group opposed the offer.

• 2006

  Nikanor lists on AIM after raising approximately US$400 million[1]Nikanor plcen.wikipedia.org

  Other

  Nikanor plc was incorporated in 2006 and floated on the London Stock Exchange Alternative Investment Market in July, raising approximately US$400 million for its DRC copper-cobalt development strategy.

1. 1Nikanor plcen.wikipedia.org
2. 2The biggest company you never heard ofreuters.com