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Ssh, don’t say ‘construction’: It’s ‘mining-related’ work ...



Ssh, don’t say ‘construction’: It’s ‘mining-related’ work ...

Murray & Roberts is very keen to stress its growth prospects lie in things like Mongolian copper projects

Ann Crotty

The independent board of Murray & Roberts (M&R) is evidently keen to ensure investors are constantly aware of the group’s potential growth prospects – particularly its growth prospects in mining.
It’s probably not a bad idea given all the grim stuff that is happening to its former peers in the construction industry. Of course M&R is no longer in the construction industry; it is in “mining-related activities” and oil and gas.According to BDO Corporate Finance, which provided an independent valuation for the independent board appointed to consider the R17 a share offer from Aton, the fair value price range for control of M&R is R20 to R22 a share.
To be expected, M&R executives, who have a lot of share options that could kick in if there’s a change of control, are backing the more bullish estimate. And they reckon the improved prospects for mining help to justify it.
Thursday’s announcement about R4-billion worth of new projects in Australasia and Mongolia will remind investors that it’s not all doom and gloom. This in turn might encourage the few undecided shareholders to hold onto their shares in the hope of an improved offer from Aton.
The Mongolian copper mining business looks particularly exciting given the recent boom in copper mining in that country. Until 2010 copper was Mongolia’s largest export; after a slump it’s on a comeback helped by the depletion of deposits in Chile and the metal’s use in electric cars and renewable energy.
Rio Tinto and the Mongolian government are the big players in the industry. But by all accounts operating in this new democracy can sometimes make South Africa seem stable.

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