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ENRC Slides as More Mining Executives Said to Quit: London Mover

Eurasian Natural Resources Corp., an iron ore and ferrochrome producer in Kazakhstan, slumped in London trading after three executives were said to have quit and another take a leave of absence amid a possible buyout bid.

ENRC fell 6.9 pence, or 2.4 percent, to 284.1 pence by the close, after earlier dropping as much as 9.9 percent. The shares have lost about half their value in the past year because of lower commodity prices and questions over corporate governance.

Company secretary Victoria Penrice, head of human resources Tony McCarthy and Stuart Nolan, group head of reward, resigned, a person familiar with the matter said, confirming a report in the Financial Times. Victor Hanna, head of Africa, took a voluntary leave of absence, the person said. ENRC declined to comment. None of the four could be reached today.

The latest moves follow the resignation of Chief Commercial Officer Jim Cochrane on April 11. On the same day, ENRC replaced Dechert LLP, a U.S. law firm hired to investigate corruption allegations. Shareholder Alexander Machkevitch on April 19 said he’s considering joining his two fellow founders of ENRC and the Kazakh government in making an offer for the mining company, sending the shares up 27 percent.

Discussions are at a preliminary stage and there can be no certainty that an offer will ultimately be made for ENRC, Machkevitch said. The company has iron ore, ferroalloy and power-production operations in Kazakhstan, copper and cobalt businesses in Africa, and a Brazilian iron ore project.

“The offer may make a lot of sense given the ongoing concerns over corporate governance and transparency,” Numis Corp. said in a note.

Investigate Payments

ENRC appointed Mehmet Dalman chairman in February 2012 to oversee a reorganization and improve corporate governance after corruption allegations. The U.K.’s Serious Fraud Office is investigating payments made by an ENRC unit in Kazakhstan, and anti-corruption groups have questioned its dealings in the Democratic Republic of the Congo.

In 2010, ENRC made a deal with Israeli billionaire Dan Gertler to take control of copper and cobalt mines he’d obtained from the DRC government, which had seized them from Vancouver-based First Quantum Ltd.

Anti-corruption groups including Global Witness have criticized the transaction, arguing Gertler obtained the assets at knock-down prices from the state as a result of his close relationship with the DRC president. Gertler denies he purchased companies at below-market rates. First Quantum also sued ENRC, which settled for $1.25 billion.

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