Russian Antimony Miner for iPads Looks at IPO to Challenge China

GeoProMining, the largest antimony producer outside of China, is considering an initial public offering of shares to help boost output of the metal used in iPads and fireproofed plastic.

“We don’t rule out an initial public offering of shares,” Sergei Nossoff, first vice president of the Moscow-based company, said in a telephone interview. GeoProMining produced 6,350 metric tons of antimony last year and plans to increase production 30 percent by 2014, he said.

Antimony, a silvery-white metal with low conductivity, is applied as a flame retardant in polymers used in electronics, clothing and food packaging. Its prices have more than doubled since early 2010 when China, which accounts for about 90 percent of global supplies, restricted exports, according to Roskill Consulting Group Ltd.

“Antimony was an eye-opener for us,” Nosoff said. “This metal turned out to be as attractive and profitable to mine as gold and copper. The market fundamentals for antimony can be compared to rare-earth metals.”

Global antimony prices surged from $6,050 a ton in December 2009 to as high as $16,580 a ton last April, while now the metal trades at $12,830 a ton, Metal Bulletin data shows.

GeoProMining, founded in 2001 by investor Siman Povarenkin, mines gold, copper and molybdenum in the former Soviet republics of Georgia and Armenia and gold and antimony in Russia. Last year, antimony accounted for about a quarter of the company’s revenue, according to Nossoff.

U.S. Demand

Antimony was ranked as the riskiest in terms of supply of 52 elements by the British Geological Survey last year, reflecting its scarcity and the concentration of output in China. Russia holds more than 19 percent of the world’s antimony with 350,000 tons, the second-largest reserves of the rare metal, the U.S. Geological Survey said in a report last month.

“There is a large demand for non-Chinese antimony production, and we are considering processing the metal for delivery to Europe and the U.S.,” Nossoff said. Now GeoProMining produces concentrate with 60 percent to 66 percent antimony content and ships it via the Magadan seaport in Russia’s Far East to Chinese customers that have a substantial unutilized downstream capacity, Nossoff said.

GeoProMining appointed Russell King, a former chief strategy officer at Anglo American Plc, as board chairman last year. The independent directors also include Deutsche Bank AG Russia chief Igor Lojevsky, former Bank of Georgia CEO Lado Gurgenidze and Pavel Teplukhin, former managing director of Troika Dialog brokerage.

Potential Acquisitions

The main goal for GeoProMining is to build a growing successful international metals and mining company, not to sell shares, Nossoff said. The producer seeks to boost production to 500,000 gold-equivalent ounces within three years from about 300,000 ounces last year, he said.

To expand, GeoProMining will look for new mine acquisitions in the former Soviet Union, according to Nossoff. The company has a capital spending target of $160 million for 2012 and 2013 combined and had a margin on earnings before interest, taxes, depreciation and amortization of more than 40 percent last year, he said.

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