Bumi investor vision at odds with the City
THE SECOND biggest shareholder in FTSE 250 miner Bumi could be on a collision course with other investors as he arrived in London yesterday to outline his vision for the company.
Indonesian mining tycoon Samin Tan, who owns 24 per cent of Bumi, is due to sound out other shareholders on a board shake-up proposed by the firm’s Indonesian investors, which could see the firm’s co-chairman Nat Rothschild demoted.
But Tan will also detail his growth strategy for the miner, which is at odds with that of many City investors.
As City A.M. revealed this week, Tan is primarily interested in putting more money into the non-coal assets indirectly owned by Bumi, which he thinks could be some of the biggest deposits of their kind in the world.
By contrast, a source said that the dominant preference among City shareholders is for Bumi to focus on coal and deleveraging. The source said that shareholder feedback strongly favours a FTSE coal player rather than a diversified miner along the lines of Xstrata’s model.
But Tan is instead keen to look at Bumi’s indirect ownership of gold, copper and zinc mines. Tan’s spokesman Ken Allan said: “We’re anticipating bringing many of the [non-coal] projects from greenfield to production much faster than is currently planned right now – we have experience at doing that.”
With the total cost as high as $2bn, that is likely to mean raising more cash. “We’ll have to put in money… Some of these projects are so capital intensive that we might need some equity – the mix of debt and equity will depends on the project economics,” he said.
“The original idea of [Bumi’s] UK listing was to have that capability – to be involved in the biggest commodities share market so if and when you need it, you can access the capital markets,” Allan added.