BHP (ASX:BHP) left holding 5.5% of new US copper listing

BHP (ASX:BHP) has emerged with a 5.5% stake in Ivanhoe Electric, the biggest copper explorer to list on Wall Street for some time.

Ivanhoe listed on Tuesday after a brief delay in the final stage of the float as global copper prices fell sharply late last week.

Well-known mining magnate Robert Friedland is behind Ivanhoe – he started Turquoise Hill and helped find the huge Oyu Togloi copper gold mine in Mongolia now controlled by Rio Tinto, as well as a gold mine in Alaska and a massive nickel deposit in Canada now owned by Vale.

Through another company, Friedland also has a major copper mine project – Kamoa-Kakula – in the Democratic Republic of Congo, as well as highly attractive mineral projects in South Africa.

Ivanhoe Electric raised $US169 million from float and the close on Tuesday gave company a market value of just over $US900 million.

Ivanhoe priced the issue of 14.4 million shares at $US11.75, the bottom of the $US11.75 to $US12.50 indicated range, late Monday night. They closed at $US10.80 on Tuesday.

The shares were also listed in Toronto.

The SEC filing from Ivanhoe said BHP held 6.6% before the issue, now cut to a 5.5% stake held by subsidiaries BHP Manganese Australia Pty Ltd and WMC Corporate Services Inc.

Friedland is the company’s chief executive and a 10% shareholder and a legend in the global mining industry with some of the biggest discoveries in recent history under his belt.

Friedland made his name and a fortune from the Voisey’s Bay nickel project in Canada in the 1990s. He was involved in finding the giant Oyu Tolgoi copper mine in Mongolia and the Kamoa-Kakula copper mine in the Democratic Republic of Congo which Ivanhoe expects to become the third biggest copper mining operation in the world.

Ivanhoe Electric has the rights to the Santa Cruz copper project in Arizona, which it says is the second largest copper deposit in the US after the Rio/BHP Resolution project nearby.

It also holds rights to the Tintic gold-copper mine in Utah and the Hog Heaven silver-gold-copper project in Montana.

Rio also owns the huge Kennecott mining operations in Utah which operates the huge Bingham Canyon Mine.

Rio Tinto also is in the process of buying the minorities in Turquoise Hill which when done, will give it a greater stake in the huge Oyu Tolgoi mine in Mongolia.

Copper has emerged as one of the essential green metals in the past few years as well as being used in everything from household appliances to electric wires and pipes.

It hit a 16-month low of below $US8,200 a tonne last week as recession fears gripped the market. It fell to a low on Comex of $3.73 a pound at one stage.

Friedland is also executive chair of the listed Ivanhoe Mines which owns the Kamoa-Kakula copper discoveries in the Democratic Republic of Congo, an existing zinc, copper, germanium, silver mine, also in the DRC (which is being upgraded) and the Platreef palladium-platinum-nickel-copper-rhodium-gold discovery in South Africa.

In its IPO filing, Ivanhoe Electric said it would focus on developing mines from mineral deposits principally located in the US, “in order to support American supply chain independence and to deliver the critical metals necessary for electrification of the economy”.

“We believe the United States is significantly under explored and has the potential to yield major new discoveries of these metals,” the prospectus said.

The company also said it has developed a cutting-edge geophysical surveying technology with a greater range than traditional systems to unlock new mineral deposits.