Exclusive: Hannam Plots Rare Earths Deal
One of the City's most prominent investment bankers is joining the board of a small German commodities group as it attempts to transform itself into a natural resources powerhouse.
I have learned that Ian Hannam, who quit JP Morgan Cazenove earlier this year after two decades in which he became known as 'the king of mining mergers', is to become a director of Tantalus Rare Earths AG, according to people close to the company.Mr Hannam is likely to invest a substantial sum in Tantalus, these people said.
Tantalus holds an exploration licence for a 300 square-kilometre area in Madagascar that is believed to hold some of the richest rare earths resources outside China.
Mr Hannam's appointment to the company's board is designed to add credibility to its efforts to attract new investment as it steps up its exploration activities.
Many of the ventures established to produce commercially-viable quantities of rare earths have performed poorly, a trend which has deterred new investment.
Rare earth exploration represents an important new frontier for the mining industry. Some of the substances found in rare earths are essential, for example, to the production of batteries for electric cars, and are increasingly sought-after amid the rapid growth in nanotechnology.
China has the richest rare earths resources in the world but in recent years has slashed export targets, resulting in the cost of some rare earth elements soaring on international markets.
Mr Hannam's appointment will come as part of a broader boardroom shake-up at Tantalus. City sources say that a senior executive with links to Siemens and a rare earths expert will also become members of Tantalus's supervisory board. The new board members are likely to be confirmed in the coming weeks.
South Korea's strategic metals reserve fund is also understood to be examining an investment in the company.
A former SAS soldier, Mr Hannam has led some of the biggest mergers and takeover deals in the City during the last 20 years, including the ongoing attempt to merge Xstrata, the miner, and Glencore, the commodities trader.
He was regarded as the pioneer of a trend to bring foreign natural resources companies to the London stock market, helping to internationalise the benchmark FTSE-100 index.
Earlier this year, he was fined £450,000 by the Financial Services Authority for disclosing inside information to a potential bidder for one of his clients.
The punishment was criticised by Mr Hannam's City allies, and he is pursuing an appeal against the decision.
It emerged this week that Mr Hannam was acquiring the Russian assets of Fleming Family & Partners, a London-based financial services firm, alongside Mark Garber, a former JP Morgan colleague.
He is also pursuing a number of other significant projects.