As Beny Steinmetz prepares to float his mining company Cunico on the London Stock Exchange, hoping to raise about a billion pounds, he is also gearing up for a NIS 4 billion issue through his company Benny Steinmetz Group Resources ?(BSGR?), possibly in Israel. ?
BSGR consolidates Steinmetz?s mining, metals, energy and engineering activities.?
A flotation in Tel Aviv would be something of a risk for Steinmetz, because the company?s activities are unfamiliar to Israeli investors. ?
There are no similar companies here, and it is somewhat doubtful that the research departments of institutional investors have been following the sector worldwide. On the other hand, precisely because it is a new area, it gives institutional investors the opportunity to diversify their portfolios.?
This seems like a reasonable risk to take. The mining sector is in the midst of a positive cycle, known as a ?super cycle,? and according to assessments the sector will continue to grow for another 15 years. ?
In fact, large mining companies worldwide estimate that as long as economic growth in China continues, so will the demand for metals such as aluminum, nickel, iron and uranium.?
Financially, BSGR is considered a good company, like Steinmetz?s other businesses. It is apparently not leveraged, profitable, and valued at an impressive billion dollars at least. The company is active in mining, where profits are high, and trades in metals, whose prices are constantly rising. ?
The issue proceeds will enable the company to purchase additional mines and continue to develop others all over the world.?
The company is considered a substantial player among the private firms operating in the field, but minor in comparison with public companies, which began operating 70 to 100 years ago. ?
The five leading firms are traded at a value of $50 billion to $150 billion each.?
BSGR?s presence in the public market is designed to accelerate its growth and in the long term, make it more like the older, large companies. The value of the public companies held by BSGR is constantly increasing, and with the Cunico flotation, reaches $7.5 billion.?
Steinmetz?s mining group activity, which began in 1998, is based in Africa and Europe. In Guinea he has lead, iron and aluminum mines, in Zambia copper. ?
He mines diamonds in Sierra Leone and the Democratic Republic of Congo. Copper and cobalt are extracted in the Democratic Republic and Zambia. He is also involved in uranium exploration in a number of countries, and deals in nickel in the Balkans.?
Overall, Steinmetz has a reputation for daring and for getting results. Most of his activity in energy is currently focused around oil drilling in Russia and Nigeria, and in gas activity in Romania and Russia. ?
The group is managed in London and South Africa. Like everyone else in the sector, Steinmetz intends to join the alternative energy wave.
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