Severstal plots IPO for gold unit

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The Independent Online

Severstal is set to list its gold division in London later this year, raising as much as $5bn (£3bn).

Following a successful London flotation of Barrick Gold's African business earlier this year, the Russian steel maker has decided to list the group, and tap into investors' growing demand for gold assets.

Concerned about the pace of the economic recovery, investors have increasingly bought gold in recent months, pushing the price to all-time highs and breaking through the $1,250-an-ounce mark. Analysts predict the commodity will continue gain in value in the next 12 months.

Severstel, which is expected to retain a 70 per cent stake in the new company, has bought three Canadian gold miners in the past three years and expects production to hit 1 million ounces by 2013.

Hitting a listing target of between $4bn and $5bn would put the group in the FTSE 100.