Friedland heralds Chinese demand as metal prices slip
www.theaustralian.news.com.au writes that,
FRESH from a successful $625 million Australian float, billionaire mining entrepreneur Robert Friedland has urged investors to focus on growing Chinese demand and not be put off by recent slides in stock and metal markets.
He was optimistic about the Oyu Tolgoi copper and gold mine in Mongolia, but refused to say when an agreement would be signed with the Government there over royalties from the huge project, which is being developing with Rio Tinto.
“The underlying demand for metals is unaffected by the mania of the market,” Mr Friedland, the chairman of Ivanhoe Mines, told the Diggers and Dealers mining conference in Kalgoorlie yesterday.
Australian resources shares slumped yesterday following falls in minerals and energy prices.
When asked about the status of Oyu Tolgoi, Mr Friedland said he was “very optimistic” and compared Mongolia and its mineral riches to the Middle East when oil was first discovered.
“Mongolia is going to be very important,” he said, adding that the small population was trying to sort out how to deal with the wealth it was going to receive.
Mr Friedland’s visit to the conference was brief and he left through a back exit immediately after his speech, refusing to answer questions on when a deal with the Mongolian government would be reached.
Earlier, he had hoped for an agreement in June, before recent elections that ended in rioting in the capital Ulan Bator and the deaths of five people.
Rio chief executive Tom Albanese said last month that he hoped an agreement could be reached on the project this year, declining to comment on an earlier target of September.
Ivanhoe has said the Mongolian mine could produce 400,000 tonnes of copper and 330,000 ounces of gold a year,
Mr Friedland said the initial public offering of Ivanhoe Australia had closed oversubscribed at the $2 a share offer price, raising $125 million, and that shares would start trading in the company today. The company’s prospectus had flagged that shares would start trading on a deferred settlement basis yesterday.
Ivanhoe Australia, which is targeting copper and gold deposits in the Cloncurry region of Queensland, will be 80 per cent owned by Ivanhoe Mines. At the offer price it has a market value of $625 million.
Mr Friedland said stock-exchange-compliant statements on Ivanhoe Australia’s projects would be released this month.
He stressed that he remained confident Chinese demand would continue to boost demand for Australian minerals, and pointed to massive Chinese migration to cities in recent times.
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