JP Morgan Asset Management
|JP Morgan Asset Management|
|Based in||New York, London|
|Active in||Africa, Central America, Sierra Leone, Spain, Northern Brazil, India, Taiwan, Brazil, Kazakhstan, United StatesWestern Australia, DR Congo, Russian Far East, Philippines, South Africa, Botswana, Guinea, Australia, Canada, Indonesia|
|Targeted||base metals, coal, energy fuels, copper, precious metals, gold|
JP Morgan/ JP Morgan Asset Management/ JP Morgan Securities
For the past decade, one investment group has lorded it over all others in its enthusiasm to fund mineral companies and projects, whatever their record on human rights and environmental protection, and wherever they might operate. It goes by the name of JPMorgan (or JP Morgan), although using this title alone is somewhat deceptive.
James Pierpoint Morgan himself was the iconic 19th century buccaneer ("robber baron") who founded US Steel, formerly the world’s biggest iron ore miner and steel producer. Today a considerable number of funds carry his name, but are mainly owned by other investment banks. However, management remains in the hands of the JPMorgan empire - and that is where, metaphorically speaking, the buck stops.
Let's now take a brief look at some of the ventures in which Mr Morgan's offshoots have recently been engaged during those past five years.
JPMorgan Asset Management
In October 2010, JPMorgan Asset Management was the second largest shareholder (at 8.57%) in Norseman Gold [Hemscott 3 November 2010].
JP Morgan in late 2010 said it planned to establish a “physical copper exchange-traded product" – following the announcement by ETF Securities Ltd that it would set up similar ETFs for base metals [MJ 29 October 2010].
In 2008 it :
- had 5.32% in Lonhro Plc and 3.83% of Lonmin plc [Hemscott 22 In 2008 it held]
- was the largest shareholder (7.96%) in Kopane Diamond Developments PLC [Hemscott 12 February 2008]
- was the second largest shareholder (5.16%) in Caledon Resources PLC [Hemscott 20 February 2008]
- held 1.65% of Vedanta Resources PLC (JP Morgan was the lead arranger for Vedanta’s LSE launch in 2003, through Ian Hannam, an ex-SAS soldier (sic) who then headed JP Morgan Capital Markets [FT 3-4 June 2008]). It was also co-lead arranger, along with Morgan Stanley, of American depositary receipts (ADRs) for Vedanta in July 2009, which raised US$1.5 billion [MJ 17 July 2009].
- held 3.60% of Ariana Resources PLC [Hemscott 18 May 2008]
In early 2007 it was advising the Saudi Arabian regime on an IPO for its state-owned Ma’aden mining company [MJ 2 February 2007]
In May 2008, along with Goldman Sachs and Morgan Stanley, JP Morgan co-ordinated the London listing of central European coal giant, New World Resources NV [see RPG Industries SE]
In July 2009, Sterlite Industries, controlled by Vedanta Resources, raised $1.5 billion through an American Depository Receipt (ADR) issue, to part-finance its power generation plans and other programmes, as well as enable Vedanta to retain its stake in Sterlite at over 60%. JPMorgan and Morgan Stanley were the joint bookrunners for the issue which, according to Sterlite/Vedanta’s Anil Agarwal, was “the first in a series of measures that would soon include acquisition of mining assets in Africa and Central America” [Economic Times, 17 July 2009].
As of 2008, JPMorgan Asset Management (UK) Ltd held 9.95% of Sierra Leone alluvial diamond explorer, Target Resources Plc [Target annual report, 15 April 2008]; and was the largest single shareholder in Ormonde Mining plc, which exploits tungsten in Spain [Ormonde annual report 12 May 2008].
In February 2009, it held 5.37% of Aricom (see Lansdowne Partners) [Hemscott 13 February 2009]; as of October 2009, it was the second largest shareholder in Norseman Gold PLC [Hemscott 13 October 2009].
In June 2009, JP Morgan was the sole bookrunner for Vedanta Resources’ US$1 billion convertible bond issue, with which the UK company aimed to fund projects and further acquisitions [FT 12 June 2009].
At the end of 2010, JP Morgan also acted as sole bookrunner for the issuing of "senior unsecured notes" on behalf of Fortescue Metals Group, Australia's third biggest iron ore miner, raising their value to US$1.5 billion [MJ 17-24 December 2010].
In 2006, it held a 8.13% stake in Serabi Mining plc, active in the Tapajos region of Northern Brazil [Serabi Mining Annual Report 2006]; 5% of Copper Resources Corporation (see Glencore Investments BV) [Piplinks 2007]; and, by mid-2007, 5.50% of Firestone Diamonds plc.
As of September 2007, JPMorgan Asset Management (UK) was the second biggest shareholder (at 7.75%) in European Nickel PLC (see Prudential PLC). In October 2009, it held 4.26% of Pan African (see Coronation Fund).
In January 2009, JPMorgan Securities agreed to act on behalf of Freeport McMoran Copper and Gold (FCX) to sell shares of common stock “from time to time” having aggregate gross proceeds of up to $750 million [Business Wire, 26 January 2009].
In May 2012 J.P. Morgan Securities LLC, Deutsche Bank AG (DB)and RBC Dominion Securities Inc served as book-running managers of the Senior Notes offering, valued at US$200 million, for Thompson Creek Metals Company Inc, aimed at completely cnstruction of the Nw York and TSX-listed company's Mt. Milligan copper-gold mine in British Columbia.
JPMorgan Asian Investment Trust plc
In 2006, JPMorgan Asian Investment Trust plc held £5,461 million worth of shares in India’s Gujarat Ambuja Cement [MJ 30 September 2006]. As of 30 September 2008, it held £4 million in Asia Cement of Taiwan. JPMorgan Asian is itself held 23.37% by pension funds, 2.82% by charities, with small stakes (below 0.25%) held by governments.
JPMorgan Chinese Investment Trust plc
JPMorgan Chinese Investment Trust plc in 2007 held a small (£1,800,000) stake in the Aluminium Corporation of China (Chinalco); and as of September 2008, £1.1 million in China Shenhua Energy.
JPMorgan Emerging Markets Investment Trust plc
JPMorgan Emerging Markets Investment Trust plc (in which Lazard Asset Management LLC held the biggest single shareholding of 12.1`% in September 2008, as of 30 June 2008, it held £ 32.733 million worth of shares in Brazil’s Vale (formerly CVRD), £11.798 million in Impala Platinum; and £1.363 million in India’s Ambuja Cements. It appears to have sold the nearly £4 million it previously held in Anglo American.
JPMorgan Fleming Mercantile Investment Trust plc
JPMorgan Fleming Mercantile Investment Trust plc/JPMF (managed by JPMorgan Asset Management(UK) Limited, and of which AXA Investment Managers UK is the largest single shareholder), as of 31 January 2008 held £6.8 million of investment in Kazakhstan’s Kazakhgold, £4.2 million in Gem Diamonds and nearly £4 million in Randgold Resources.
JPMF's Natural Resources Fund
In July 2009, JPMF's Natural Resources Fund held 7.6% of African Eagle Resources PLC [Hemscott 3 August 2009]; and 9.25% of Ormonde Mining Plc (active in Spain) [Hemscott 16 August 2009].
JPMorgan Income & Capital Investment Trust plc
JPMorgan Income & Capital Investment Trust plc, as of 28 February 2007, held shares worth £3.584 million in Rio Tinto, and £3.034 million in BHP Billiton.
JPMorgan Income & Capital Management Trust plc, as of 31 August 2007, held £2.903 million in Xstrata.
JPMorgan Income & Growth Investment Trust plc
JPMorgan Income & Growth Investment Trust plc, as of 31 July 2008 held: £2 million in Anglo American.
JPMorgan Indian Investment Trust plc
JPMorgan Indian Investment Trust plc, as of September 2008, held: £2.3 million shares in Ambjua Cements, £2.1 million in Associated Cements, and £1.4 million in Jindal Steel & Power.
JPMorgan Russian Securities
In late 2007 JPMorgan Russian Securities plc held an ADR in Norilsk Nickel, a GDR in Evraz, a minor stake in Severstal and Magnitogorsk Iron and Steel, and a share in Polyus Zoloto.
As of 31 October 2008, it held:
- £6,314, 000 of shares in Severstal;
- nearly £6 million in Magnitorsk Iron & Steel;
- just over £4 million in Norilsk Nickel;
- £3,339,000 in Novolipetsk Iron & Steel;
- and £757,000 in Evraz GDR.
In 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 United State’s 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].
JPMorgan Nominees Australia
JPMorgan Nominees Australia has a 2.38% share of Fortescue Metals Group (see ANZ Nominees) and a combined 7.21% stake in Allied Gold Ltd (see HSBC Global Custody Nominees) [Hemscott 12 February 2009], as well as 5.08% of Aquarius Platinum [Hemscott 13 February 2009].
JPMorgan Overseas Investment Trust plc
JPMorgan Overseas Investment Trust plc (as of 30 June 2008) held £2.1 million of shares in Yamana Gold; £1.6 million of shares in Vedanta Resources; and £1.5 million of shares in BHP Billiton.
JPMorgan Cazenove was named by Hemscott Services in May 2011, as the UK's leading corporate advisory firm, having 239 clients. (Numis Securities was listed as number 2; Investec Bank PLC came in fourth position; UBS Investment Bank (see UBS AG) was in fifth; and Evolution Securities came in at 6th, with 81 clients) [CITYAM, 31 May 2011].
In December 2011, JPMorgan Cazenove acted as lead broker for the issue of new shares in the UK-Australian-South African-based CoAL (Coal of Africa Ltd) as it attempted to finance its highly-controversial Makhado colliery coking-coal project in South Africa's Limpopo province.
JPMorgan Cazenove was appointed Nominated Advisor (NOMAD) and broker in 2006 for Nikanor, the copper company operating in DR Congo [FT 5 July 2006]. It was sole bookrunner, with Canaccord Adams (see Canaccord Capital Corp) as co-lead manager for the placing of shares in London-based (non-LSE listed) Aricom, a company with mineral holdings in Russia’s Far East[Reuters, 5 February 2009].
Joined by Deutsche Bank, in February 2009 JPMorgan Cazenove led Xstrata’s rights issue, in an attempt by the UK-Swiss mining company to grapple with its debt [TheLawyer.com, 9 February 2009; MJ 20 March 2009].
JPMorgan Chase & Co
JPMorgan Chase & Co:
- in 2006 was invested in Intex (formerly Crew Gold)’s Masara gold project in the Philippines [PipLinks Research, 2007].
- in 2008 held 37.5% of Jubilee Platinum PLC – active in South Africa [Hemscott 12 February 2008]
- had a small holding in African Copper plc [Hemscott 12 February 2009]
- had 65% of Eurasia Mining PLC [see Firebird [Hemscott 11 November 2008];
- in 2009 had 7.48% of African Eagle Resources PLC [Hemscott 3 August 2009], and
- 9.45% of Avocet Mining PLC (see Elliott Associates LP) [Hesmcott 14 February 2009]
- holds 4.82% in Caledon Resources (see Polo Resources) [Hemscott 16 August 2009] and is the largest (at 10.07%) shareholder in Firestone Diamonds plc [Hemscott 16 August 2009].
In December 2010, JPMorgan Chase acted as administrative agent of a credit facility for Thompson Creek Metals - an important molybdeum miner in the USA and Canada - along with Royal Bank of Canada, BBVA Compass, Deutsche Bank AG (DB) Standard Bank Plc and Societe Generale/SG [CNW 10 December 2010].
A year later, in November 2011, the firm was reported to be acquiring a stake in the London Metal Exchange from the collapsed MF Global group (see Man Financial Ltd).
This would increase its ownership of the Exchange to 10.9%, thus making it the LME's largest shareholder - in front of Goldman Sachs Group (with 9.5%); Metdist (9.4%) and UBS AG (4.3%)[ MJ 25 November 2011].
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 JPMorgan Chase as the 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 16,540 million euros of such funding [Bankrolling Climate Change, urgewald et al, 2011].
Chase Nominees hold:
- 3.14% of BHP Billiton PLC [Hemscott 16 August 2009];
- 4.24% of Rio Tinto PLC [Hemscott 16 August 2009];
- 9.04% of Shanta Gold (see HSBC Global Custody Nominees);
- 3.99% of Aquarius Platinum [Hemscott 5 August 2009];
- 9.48% of African Diamonds PLC operating in Botswana, Guinea, Sierre Leone and DR Congo [Hemscott 4 August 2009].
- Chase Nominees also holds 13.1% of voting rights in JP Morgan Indian Investment Trust plc.
In 2008, the nominees held:
- 18.73% of Hidefield Gold PLC;
- 7.43% of Mariana Resources Ltd (see CS) [Hemscott 12 February 2008];
- 5.49% of Firestone Diamonds PLC [Hemscott 11 February 2008];
- and 4.05% of Van Dieman Mines PLC (see Galena) [Hemscott 12 February 2008].
- As of 15 September 2007 it also held 8.85% of West African Diamonds PLC.
- was in 2008 the biggest shareholder (9.03%) in Ormonde Mining PLC (which has a tungsten project in Spain [Hemscott 13 February 2008];
- held 8.32% in Central China Goldfields PLC [Hemscott 11 February 2008];
- was second largest shareholder (10.08%) in Diamondcorp PLC [Hemscott 11 February 2008];
- owned 3.82% of City Natural Resources High Yield Trust PLC (qv) [Hemscott 11 February 2008].
Brazilian iron ore miner Vale announced in December 2010 that it would would list approximately 600 million shares on the Hong Kong Stock Exchange, in any offer being underwritten by J.P. Morgan Securities (Asia-Pacific) Limited [Interfax China Metals and Mining, 3 December 2010].
In October 2010, JP Morgan announced it would launch a "physical-copper-exchange-traded-product" (sic) "to mirror as closely as possible the performance of the price of physical copper" [MJ 29 October 2010].
On 26 May 2011, Fortescue Metals, one of Australia's biggest iron ore miners, apparently dropped plans to proceed with a previously-announced $1 billion unsecured term loan facility that had been launched only three days before by JP Morgan.
However, Fortescue said it had received commitments from a syndicate of banks for a $500 million three-year senior unsecured revolving credit facility.
In October 2011, JP Morgan became the eighth foreign financial institution to gain entry to China's main precious metals bourse, the Shanghai Gold Exchange, and trade upon it.
In 2010-2011, JP Morgan acted on behalf of Indonesia's Bakrie group as it bought into Nat Rothschild's Vallar plc, and later listed its coal giant, Bumi plc, on the London Stock Exchange [See http://www.minesandcommunities.org//article.php?a=11933&l=1; http://moneytometal.org/index.php/NR_Investments_Ltd].
In late 2012, the US Securities and Exchange Commission (SEC) approved a plan by JP Morgan Chase to launch an Exchange Traded Fund (ETF), by which retail investors would be able to trade supplies of A Grade copper "easily for the first time" [MJ 21-28 December 2013].
According to Reuters: "Opponents of the ETF said the product would affect supplies and create a boom and bust cycle". Bloomberg also commented that the the SEC ruling "ends a two year battle for approval by JP Morgan due to concerns that the ETF would effectively remove a chunk of metal from the market, cutting supply and inflating prices" [MJ ibid]