London draws emerging miners, Toronto wins juniors

By Eric Onstad and Cameron French

LONDON/TORONTO (Reuters) - London's deep capital markets, tolerance of political risk and friendlier regulation is trumping other bourses in attracting major listings of miners although Toronto is still tops for junior and exploration firms.

London is now home to most of the world's big mining groups after recent mergers stripped Canada of its prize companies.

In January 2005, the value of mining companies with primary listings on the main markets of London and Toronto were about the same at around $117 billion (59 million pounds).

But three years later London had overtaken its rival, growing to $409 billion versus $320 billion, a study by Ernst & Young showed.

A succession of sizeable mining firms from Latin America, and eastern Europe have flocked to London recently for IPOs that have raised billions of dollars.

This comes as high metals prices and a scarcity of resources has driven miners to explore in countries that would have been overlooked by major players in the past due to stability concerns.

"London is viewed as a place where perhaps there's a bit better understanding of the political risks," said Tom Whelan, Ernst & Young's Canadian mining leader.

In May alone, Mexico's Fresnillo Ltd. (FRES.L: Quote, Profile, Research), the world's biggest silver producer, raised 905 million pounds in a London flotation while the IPO of Czech coal miner New World Resources NWRW.L (NWRSsp.PR: Quote, Profile, Research) raised 1.1 billion pounds.