Qatar’s wealth fund nears deal for minority stake in Ivanhoe

Qatar’s $US524 billion ($785.4b) sovereign wealth fund is nearing a deal to buy a minority stake in Canada’s Ivanhoe Mines, according to people familiar with the matter.

The Qatar Investment Authority is set to make an announcement on the purchase in the coming days, the people said, asking not to be identified as the information is confidential. It wasn’t immediately clear how much the fund would buy of Ivanhoe, which has a market value of about C$17.9 billion ($19.5 billion).

Representatives for the QIA and Ivanhoe declined to comment.

Ivanhoe, run by billionaire Robert Friedland, operates the Kamoa-Kakula complex in the Democratic Republic of Congo, which is one of the world’s top sources of copper.

The company was hit by a major setback at its flagship project earlier this year. Ivanhoe slashed its full-year output guidance after seismic activity caused flooding deep underground at the operation in Congo. Its stock is down more than 20 per cent this year.

An investment in Ivanhoe could be one of the QIA’s largest forays into the mining industry since it purchased a stake in Glencore several years ago.

Under newly-appointed Chief Executive Officer Mohammed Al Sowaidi, the wealth fund is expected to more aggressively deploy the billions of dollars it’s likely to receive from an expansion of the country’s gas projects.

The wealth fund plans to deploy an additional $US500 billion ($749.4b) in the US over the next decade, Al Sowaidi said in an interview in May. That echoes the US-focused investment strategy that some of its Gulf peers such as the Saudi Arabia’s Public Investment Fund and state-owned entities in the United Arab Emirates have embarked on.

Ivanhoe is already backed by Chinese investors, counting CITIC Metal as its largest shareholder.

Zijin Mining Group Co. also has a major stake.

Bloomberg.