Ian Hannam

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Mining-alcans-60px.jpg This article is part of the Mining and Metals project of SpinWatch

Ian Charles Hannam was chairman of capital markets at JP Morgan Cazenove until he resigned in April 2012 after being fined £450,000 by the Financial Services Authority (FSA) for market abuse related to passing on insider information. Hannam was found to have misused information he obtained in his position as an adviser to Heritage Oil. He said he intended to appeal the FSA's finding and [1] would remain at the firm until he had completed the £50bn merger between Glencore and Xstrata, which is expected to close by the end of summer 2012.[2]

Well known for engineering high-profile mergers such as between Virgin Media and NTL,[3] Hannam is regarded as the “doyen of the mining industry” by corporate financiers [4] for his involvement with mining giants such as BHP Billiton, Vedanta, Xstrata and for the development of mining projects in Central Asia and ‘frontier’ regions such as Iraq and Afghanistan.

Contents

FSA fine for 'market abuse'

According to the Telegraph:

In two emails, which the FSA say breached disclosure rules, the regulator points to 11 words it claims makes Mr Hannam culpable.
"PS - Tony, has just found oil and it is looking good," said one the email, describing a new oil field found by Heritage, one of JP Morgan's clients. That was sent in October 2008 and another email, the previous month contained information about a potential offer for Heritage. [2]

Clients

Hannam’s clients have included South African Breweries SAB Miller,[5] HSBC,[6] commercial property corporation Land Securities,[7] and Virgin and NTL.[8]

He was revealed to be the point man in an unauthorized takeover attempt of Dow Chemicals in 2007.[9]

Iraq

Upon meeting the Iraqi minister of oil, Hannam reportedly stated his intentions were to "make five new Iraqi billionaires every year for the next 10 years."[10] He has channelled around $8billion of investment into Iraq, for oil, cement and other manufacturing deals.[11]


Mining clients

Hannam lists some of the largest mining corporations in the world as his clients.

Hannam led the flotation of Swiss-based mining giant Xstrata on the London Stock Exchange and remains a long-term adviser to the corporation and its current chief executive Mick Davis.[12] He steered Xstrata’s £8.4bn acquisition of Canadian mining corporation Falconbridge in 2006.[13] Hannam is so close to Xstrata that he has been noticeably absent from the possible £1bn Glencore IPO, due to a potential conflict of interest.[14]

He helped lead the creation of BHP Billiton from the merger of BHP and Billiton.[15]

He was seen as key to the successful flotation of Vedanta Resources into the London Stock Exchange in 2003,[16] helping to raise at least $876m in its IPO.[17]

Alongside Barry Weir and Neil Passmore, Hannam is lead adviser to rare-diamond producer Gem Diamonds in its potential takeover of its Africa-focused competitor Lucara Diamond.[18]

He also advises Nat Rothschild’s Vallar mining venture; the world’s largest silver producer Fresnillo;[19] iron ore pellet producer Ferrexpo;[20] Kazakh copper giant Kazakhmys[21] and hard coal and coke producer New World Resources.[22]

Mining in Afghanistan

Hannam is said to have taken a personal interest in the development of a mining industry in Afghanistan.[23] The Pentagon has estimated that Afghanistan holds approximately $900billion of mineral deposits.[24] Afghan official estimates claim this figure to be too low, valuing their mineral assets at $3trillion.[25] Hannam has stated, “Afghanistan could be one of the leading producers of copper, gold, lithium and iron ore in the world.”[26]

Long-term political instability in Afghanistan and the lack of infrastructure have ensured that Afghanistan’s resources remain largely unearthed, though the US military has recently begun offering logistical and moral support for mining development in the region. In 2010 US Gen. David Petraeus, commander of the Afghanistan campaign, announced, "This is the time in Afghanistan for the adventure venture capitalists,”[27] despite Afghanistan ranking as the second most corrupt country in the world by Transparency International that same year.[28] Hannam is key amongst the vanguard of venture-capitalists developing mining projects in Afghanistan.

Hannam leads an experimental step towards large-scale mining in Afghanistan by the facilitation of major investment into the Qara Zaghan gold mine in the northern Baghlan province of Afghanistan. Peter Hambro of Peter Hambro Mining, Joshua Fink of Enso Capital, Thai businessman Pairoj Piempongsant and others have invested at least $40 million into the project through the Central Asian Resources investment vehicle established by Hannam.[29] Though Hannam expects a large payoff to the investors, JP Morgan themselves are reputed to have not offered their own investment. Instead Hannam charges less than per-usual advisory fees, describing the project as a charitable endeavour.[30] The Qara Zaghan mine is run by Afghan Gold, whose chairman is Sadat Naderi and CEO is Richard Williams - a former SAS commander and personal friend to Hannam.[31]


Biography

Born in 1956 and raised in Bermondsey, south London, Hannam joined the Artist Rifles unit of the SAS at 17 years old.[32] He obtained a degree in civil engineering from Imperial College London and began working for Taylor Woodrow upon graduation in 1977.[33] There he developed infrastructure for the SAS in Oman as part of the final push to quash the Dhofar Rebellion.[34]

After deployment in Nigeria and a redeployment in Oman, Hannam turned to business, studying an MBA at the London Business School. He began working at Salomon Brothers, New York in 1984 and left upon the 1992 collapse of Robert Maxwell’s Mirror Group, which Hannam had recently been amongst the lead bankers marketing the IPO of - a deal which netted Salomon Brothers a loss. Following this, Hannam began work at the Scottish merchant bank Robert Fleming, becoming the most highly paid employee by 2000, an accolade which helped spare him redundancy when Fleming was acquired by Chase Manhattan in 2001 and during Chase’s subsequent merge with JP Morgan in 2002. Hannam is widely accredited with leading JP Morgan’s joint venture with Cazenove, the stockbroker assumed to represent the British Royal Family, in 2004,[35] forming the investment bank JP Morgan Cazenove Limited. In 2009 this was wholly subsumed under JP Morgan for 1billion GBP.[36]

Hannam is currently chairperson of JP Morgan Cazenove’s capital markets and is a member of the executive committee.[37]

Affiliations

JP Morgan Cazenove

Contact

Email: ian.c.hannam@jpmorgancazenove.com
Phone: (JP Morgan Cazenove) 020 7588 2828

Resources

Notes

  1. Brooke Masters, Javier Blas and Ben Fenton in London, Mining banker fined for market abuse, ft.com, 3 April 2012, accessed same day
  2. 2.0 2.1 Helia Ebrahimi, Top JP Morgan banker Ian Hannam resigns over £450,000 fine for market abuse, The Telegraph, 03 Apr 2012, accessed same day
  3. Martin Baker, ‘The Rainmaker: Virgin soldier who fights for every deal', “The Telegraph”, 26 January 2006, accessed 12 July 2011
  4. David Hellier, ‘Hannam left out in the cold for Glencore IPO’, “City AM”, 8 March 2011, accessed 12 July 2011
  5. Marion Dakers, ‘Heritage Oil shares surge after talk of takeover interest from the Middle East’, “City AM”, 18 March 2011, accessed 10 July 2011
  6. Abigail Hofman, ‘Abigail with attitude: HSBC - it’s the management, stupid.’, “Euromoney,” December 2009, accessed 18 July 2011.
  7. JP Morgan Cazenove’s star bankers’, “Financial News”, 16 November 2009, accessed 18 July 2011.
  8. Martin Baker, ‘The Rainmaker: Virgin soldier who fights for every deal', “The Telegraph”, 26 January 2006, accessed 12 July 2011
  9. Andrew Ross Sorkin, ‘Behind the Dow Chemical Firings, a Tangled Corporate Drama’, “New York Times”, 9 May 2007, accessed 13 July 2011.
  10. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  11. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  12. David Hellier, ‘Hannam left out in the cold for Glencore IPO’, “City AM”, 8 March 2011, accessed 10 July 2011
  13. Marion Dakers, ‘Heritage Oil shares surge after talk of takeover interest from the Middle East’, “City AM”, 18 March 2011, accessed 10 July 2011
  14. David Hellier, ‘Hannam left out in the cold for Glencore IPO’, “City AM”, 8 March 2011, accessed 10 July 2011
  15. Martin Baker, ‘The Rainmaker: Virgin soldier who fights for every deal', “The Telegraph”, 26 January 2006, accessed 10 July 2011
  16. Robert Orr, ‘Vedanta Set to be Fifth Success for ‘Citizen Soldier‘ Hannam, “Financial Times”, 3 June 2006, copy accessed 12 June 2011]
  17. Steve Goldstein, ‘Indian mining Vedanta IPO to raise at least $876m’, “MarketWatch”, 5 December 2003, accessed 15 July 2011.
  18. Alison Lock, ‘Gem shares sparkle on Lucara talks’, “City A.M.”, 22 March 2011, accessed 10 July 2011
  19. Marion Dakers, ‘Heritage Oil shares surge after talk of takeover interest from the Middle East’, “City AM”, 18 March 2011, accessed 11 July 2011
  20. Emiliya Mychasuk and Emiko Terazono, ‘Pride of Pierpont’, “The FT”, 7 October 2008, accessed 13 July 2011
  21. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  22. Emiliya Mychasuk and Emiko Terazono, ‘Pride of Pierpont’, “The FT”, 7 October 2008, accessed 12 July 2011
  23. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  24. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  25. James Risen, ‘World’s Mining Companies Covet Afghan Riches’, “New York Times”, 17 June 2010, accessed 20 July 2011.
  26. James Risen, ‘World’s Mining Companies Covet Afghan Riches’, “New York Times”, 17 June 2010, accessed 20 July 2011.
  27. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  28. Transparency International 2010 Corruption Index
  29. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  30. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  31. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  32. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  33. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  34. James Bandler, ‘J.P. Morgan’s hunt for Afghan gold’, “CNN Money”, 11 May 2011, accessed 12 July 2011
  35. Mark Tran, ‘Cazenove aims for flotation’, “The Guardian”, 24 May 2004, accessed 12 July 2011.
  36. Jill Treanor, ‘Blue-blooded City broker Cazenove bought by US bank in £1bn deal’, “The Guardian”, 19 November 2009, accessed 12 July 2011.
  37. JPMorgan Cazenove Limited: Board of Directors’. “Business Week”, accessed 10 July 2011
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