|Based in||New York|
|Active in||Indonesia, Tibet, Philippines, Australia, India, Japan, Peru|
|Targeted||base metals, energy fuels, precious metals|
Citibank/ Citigroup/ Citicorp/ Citi. Until a near-meltdown, following the “sub prime crisis” of 2007-08, this was the world’s biggest financial services provider. In February 2009, the US Treasury agreed a deal whereby it would take up a 36% holding in the bank.
Since 2005, Citigroup has participated in several major “revolving credit” placements with mining companies. These companies include: with
- AngloGold Ashanti (RC: US$ 700 million);
- Barrick Gold (US$1.5 billion);
- PT Freeport Indonesia (US$ 465 million);
- Newmont Mining (US$ 2 billion)
As od September 2007,Citicorp Nominees Pty Ltd was the fifth largest shareholder (7.67%) in Fortescue Metals (see ANZ Nominees); a 3.5% shareholder in Medusa Mining Ltd (see Gazmetall), active in gold-copper forays in the Philippines [company website, 14 January 2009]; and it held 1.51% of Extract Resources, as of September 2007.
The Nominees are, collectively, the 6th largest group of shareholders in Australian gold exploration company, Millenium Minerals Ltd.
The Nominees were in mid-2011 also the largest stakeholders (at 18.2%) in the Ausralian company, Kingsrose, which has a licence to exploit one of Indonesia's most promising new gold mines, Way Linggo in Sumatra [MJ 24 June 2011].
In April 2007, Citi provided a bridge loan to Vedanta Resources PLC (US$ 1.1 billion euros) and, two months later, arranged a share issue (IPO) of US$ 2 billion, to enable Vedanta’s subsidiary, Sterlite Resources, to trade on the New York Stock Exchange [Bank Secrets 2007].
Citi’s self-owned or managed shares include:
|US$ 156.7 million||in||Freeport McMoran-Phelps Dodge|
|US$ 74 million||in||Barrick Gold|
|US$ 55.2 million||in||GoldCorp|
|US$ 15.4 million||in||AngloGold Ashanti|
|US$ 1.9 million||in||Vedanta Resources|
|US$ 0.01 million||in||DRD Gold|
[Bank Secrets 2007]
On 2 February 2009, along with Macquarie Bank Ltd, Citigroup managed a share offering, aimed at raising US$130 million for Hong Kong-based Real Gold Mining – the second biggest IPO in Hong Kong since October 2008 [South China Morning Post, 2 February 2009].
A day later (on 3 February 2009) Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., with BMO Capital Markets as lead manager, raised around $US 1.7 billion in a public offerings of 34,500,000 shares of common stock, and $517.5 million of convertible senior notes due 2012, for Newmont Mining. The US’ leading gold company intends to use the net proceeds to fund acquisition of the remaining one-third interest in its huge Boddington gold project in Western Australia [PR Newswire/First Call, 3 February 2009].
In November 2010, Citigroup Global Markets Asia Ltd conducted an IPO (Initial Public Offering) for Toronto-listed China Gold International Resources Corp, in order for it to finance acquisition of a company called Skyland Mining Ltd, whose assets include the Jiama copper mine in Tibet.
On completion of the deal, Jiama would become the second mine controlled by China Gold International in the Chinese-occupied Tibetan autonomous region.
In October 2010, at a special shareholders' meeting in Toronto to finalise this deal, the company was confronted by dozens of Tibetans and Tibet supporters, who called on Citi to immediately withdraw from the occupied country.
The demonstators claimed that the Jiama mine would trespass on the sacred birthplace of the major Tibetan historical figure, King Songtsen Gampo - who unified the Tibetan empire in the seventh century.
The previous year, Tibetans in Jiama had protested against water contamination and resettlement of nomads, allegedly resulting from the mining operations [Press Release, Canadian Students for a Free Tibet, 14 October 2010].
One of the largest mining-related IPOs (Initial Public Offerings) of 2010 was by India's largest state-owned mining company, Coal India Ltd (CIL): Citigroup managed the share issue, along with Morgan Stanley, Kotak Mahindra Capital, Enam Securities, Deutsche Bank AG (DB) and Bank of America (Bank of America-Merrill Lynch) [FT 13 September 2010].
On the eve of the climate change conference (Conference of Parties) held in Durban, South Africa, in late 2011, four organisations (urgewald of Germany, BankTrack, and South Africa groups Earthlife Africa and groundWork)identified Citi as the second heaviest financier of coal fired electricity and coal mining in the period 2005-2011. According to their report, the bank had released no fewer than 13, 751 million euros of such funding [Bankrolling Climate Change, urgewald et al, 2011].
In June 2012, with the assistance of BankTrack, Greenpeace released a report which “rebukes the finance sector for ignoring nuclear risks”.
According to the report, “Investors in nuclear power are being sold precarious and potentially damaging investments because the industry's risks are regularly being overlooked or underestimated”.
Referring specifically to the TEPCO Fukushima nuclear plant disaster of 2011, the report claimed that:“ Crucial vulnerabilities in reactor design, major frauds, cover-ups and governance issues; collusion and loose regulatory supervision; and well-understood natural disaster warnings were all ignored and hidden from investors. This is a common and continuing theme, not just in Japan, but globally”.
The report said that “dozens of banks” provided TEPCO with at least €54bn of low-cost capital through bond issues, corporate loans and a share issuance between 2000 and 2011”. Bond issues provided most of this funding, with the largest bond underwriters being led by Citigroup, followed by Mizuho Corporate Bank, Nomura, Sumitomo Mitsui, Mitsubishi UFJ, BNP Paribas, DB (Deutsche Bank), Merrill Lynch, Daiwa Securities, Morgan Stanley and Goldman Sachs Group were the largest bond-underwriters.
The Greenpeace Report, Toxic Assets is at:
In October 2012, Citibank was selected by the board of creditors of Lima-based Doe Run Perú to manage the international sale of the La Oroya metallurgical complex in the country's Junín region. La Oroya has the capacity to produce 11 different metals, but mainly copper, zinc, lead and silver. The Cobriza copper mine in Huancavelica region is also to form part of the tender.
According to Peru's Ministry of Energy and Mines: "Of the nine banks invited to participate, only Citibank and UBS presented proposals to manage the tender to the administrator assigned to the case, Right Business. Citibank estimated a timeline of 5-6 months to carry out the sale while UBS calculated 8-9 months".
The La Oroya complex has been at the centre of a long-drawn out conflict, pitting its US management and some workers on the one hand, against the Peruvian environmental authorities, local communities and environmentalists on the other hand.
Doe Run Perú is a subsidiary of privately-held US company Renco International; it acquired the La Oroya smelter when it was privatized in 1997 and agreed to a series of environmental improvements to reduce heavy metals and other emissions.
However, the company siginally failed to do this; nor did it build the sulfuric acid treatment plant which was part of the agreement - a task which will now be "tasked to the new operator" [Business News Americas, 16 October 2012].
However, given civil opposition to reviving the complex, there's doubt as to whether any new operator will be found who has the money or capacity to make it truly safe [See: http://www.minesandcommunities.org/article.php?a=11616&l=1].