All that Kaz

12 March 2008 By John Foley Follow @johnsfoley

The preliminary discussions between ENRC and Kazakhmys about forming a Kazakh resources champion are likely to hinge largely on politics and the machinations of local oligarchs. Minority investors in both Londonlisted companies will have to keep their fingers crossed.

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Eurasian National Resources Corporation (ENRC) said on Wedenesday that it had held informal talks with rival Kazakh miner Kazakhmys about a potential merger. Talks were at a very early stage, said a person close to the situation.

ENRC is a multicommodity miner, whose main outputs are aluminium, ferrochrome an iron ore. It also produces 16% of Kazakhstan's energy. Kazakhmys is predominantly a copper producer. Both are listed in London.

Since floating in December 2007 at 540p a share, ENRC's stock has almost doubled, giving it a value on Tuesday's close of £13bn. Kazakhmys floated at the same price in October 2005. Its shares have almost tripled, valuing it at £7bn.

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