Steinmetz Group Planning IPO for Sierra Leone Diamond Mine
1/26/2012 4:45:36 AM Shira
The Beny Steinmetz Group, a Geneva-based natural resources company and one of the De Beers Diamond Trading Company’s (DTC) largest sightholders, is planning an initial IPO (public offering) of its Koidu mine, Sierra Leone’s largest diamond mine, on the Hong Kong stock exchange via a holding company called Octea. Octea owns the mine itself and will be the first diamond mining company traded in Asia.
The Koidu mine—from which Tiffany & Co sources many diamonds—is expected to produce 500,000 carats in 2012 and there’s a strong possibility that the mine will be offered to investors in Hong Kong later this year. The Steinmetz group aims to raise $400-$600 million and achieve a valuation of $2-$3 billion. The fundraising would finance development of a new diamond field in Sierra Leone.
"Octea is the latest example of how diamond producers are trying to capitalize on rising demand from Asia amid declining diamond supplies,” said the Financial Times.
The floating of Koidu mine would be Steinmetz's first return to the capital market after selling off Katanga Mining Ltd. to Glencore International, because of the global financial downturn.
In November 2011, Anglo American took over De Beers in a $5.1 billion takeover deal. Alrosa, the Russian diamond giant, is apparently planning a listing and Graff Diamonds is planning a Hong Kong listing—to finance its Asia expansion.