ANGLO AMERICAN's Los Bronces copper mine in Chile.

ANGLO AMERICAN's Los Bronces copper mine in Chile.

Anglo American's MacKenzie to Lead New Copper Group

Issue 70, January 2014

Anglo American’s former head of copper, John MacKenzie, is set to launch a new publicly-listed mining company backed by London-based hedge fund Audley Capital, Global Mining Observer has exclusively learnt. The new vehicle is targeting acquisitions in copper and base metals up to $700m and is seeking a listing in London or Toronto, according to insiders.

MacKenzie, a career mining engineer, resigned from Anglo American in October last year “to pursue other opportunities”, having completed the 80 per cent expansion of its Los Bronces copper mine in Chile. He is believed to have joined hedge fund Audley Capital at the beginning of 2014.

MacKenzie joins a wave of mining heavyweights, including Xstrata’s long-serving former head Mick Davis, Vale’s former president Roger Agnelli and ex-Barrick boss Aaron Regent, to found their own specialist vehicles aimed at capitalising on retrenchment by majors and distressed valuations for juniors.

But whilst Regent, Agnelli and Davis have all structured private vehicles, MacKenzie is planning a public listing, offering greater potential scale. Audley Capital, led by arch-dealmaker Julian Treger, is expected to be the company’s cornerstone investor.

Audley has a track record of plundering top tier management for under-utilised assets, introducing former Lonmin boss Brad Mills as chief executive of Mandalay Resources and Rio Tinto’s Keith Calder as president of Western Coal, later sold to Walter Energy for $3.3bn in a deal that earned Audley’s investors more than $400m. Most recently it landed Stuart Brown, former finance director of De Beers, as the new head of diamond junior Firestone.

MacKenzie’s new vehicle promises to end a drought of large mining issues. It also promises a new font of opportunities for royalty group Anglo Pacific, which appointed Treger as its chief executive in October. The two groups are expected to have a close working relationship, potentially swapping royalties for capital expenditure commitments.

“Julian’s identified many businesses over the years that are candidates for improving returns,” says Charles Stanley analyst, Kieron Hodgson. “If you’ve got cash and a long term investment horizon, or a longer horizon than most equity holders, you can generate serious profits at this point.”

“If you’ve got cash and a long term investment horizon, you can generate serious profits at this point.”

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