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Abu Dhabi conglomerate embarks on flurry of mining deals

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The mining business owned by $240bn Abu Dhabi conglomerate IHC has embarked on a flurry of deals in Africa, after breaking into the market last year with its acquisition of a major Zambian copper mine.

IHC chief executive Syed Basar Shueb, told the Financial Times that its IRH subsidiary had signed joint venture agreements for iron ore mining in two places in Angola — Kassala Kitungo and Munenga — and that it was in advanced talks to mine nickel in Burundi as well as various metals in Tanzania and Kenya.

IHC expected to make about $1bn of mining acquisitions this year, Shueb told the FT.

The Abu Dhabi group’s foray into the mining industry comes as BHP’s £34bn approach for rival Anglo American highlights the race to secure access to minerals such as copper, iron ore and lithium that are critical to the transition to cleaner energy.

Asked who IRH was bidding against for mining assets, Shueb said the “majority of the time you’re competing with Chinese. There’s no other countries.”

IHC is chaired by Abu Dhabi royal Sheikh Tahnoon bin Zayed Al Nahyan, who is also the United Arab Emirates’ national security adviser and a key business figure. 

IRH appeared to have come from nowhere when it launched a $1.1bn bid for 51 per cent of the Mopani copper mine in Zambia last year. But Shueb said the group had been formed from different mining interests belonging to IHC and Royal Group, an investment group also chaired by Sheikh Tahnoon that preceded IHC. 

“Whether it’s a mining or a refinery business of the gold, or the trading side of the business, we have consolidated everything under IRH,” Shueb said.

He said IRH’s strategy was to buy mining concessions, as opposed to providing investment to other operators in return for future supply of raw materials, and that it wanted to make its mining projects “green” by using renewable energy sources, such as solar power.

IRH did previously have some involvement in a gold trading scheme in the Democratic Republic of Congo (DRC). The company said it had facilitated an arrangement between Auric Hub Gold Refinery, an Abu Dhabi gold and silver refinery, and gold trading business Primera Gold DRC, which last year won a 25-year monopoly for hand dug gold in the DRC. 

However, Shueb said this trading operation was now being handed over to the DRC government.

He also said IRH was discussing taking over Konkola Copper Mines with the Zambian government. Vedanta, the Indian metals and energy group, currently operates the mine and wants to sell a minority stake.

“Next to Mopani is KCM . . . we are talking to the government because it makes a lot of sense that one party manages Mopani and KCM,” he said.

“We had a few meetings with Vedanta and the government, but of course, Vedanta is a large player, they are much more experienced than us.” 

IRH employed about 60 mining specialists, Shueb said, and was owned by an IHC holding group called TwoPointZero that had other technology, financial sector, and metals assets.

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