 Energy Resources LLC, a
closely held coking coal producer in Mongolia, is considering an initial public
offering in Hong Kong or London, the majority shareholder said according to the
Bloomberg.
Energy Resources
"knows the ability to raise money domestically is limited so it needs to
look abroad to raise funds," said Masa Igata, chief executive officer of
Frontier Securities which advises investors on Mongolia. "After SouthGobi’s
listing in Hong Kong, it should be easier for Mongolian companies to list
overseas as their profile has been raised."
Energy Resources may
need "at least several hundred million dollars" as part of a plan to
raise annual production to 10 million metric tons in a few years, Igata said.
Adilbish declined to comment on how much the company is seeking to raise in the
possible share sale.
The Mongolian company
operates one pit at Ukhaa Khudag in the south of the country, which produced
about 1.8 million tons of coking coal last year, Financial Director Baterdene
Gansukh said in an interview. Output may rise to as much as 4 million tons this
year, he said.
Macquarie Bank Ltd.
raised its global estimate for 2010 coking coal demand to 244 million tons from
225 million tons in November. BHP Billiton Ltd., the world’s
largest mining company, is probably asking Japanese steelmakers to pay $240 a
ton for coking coal, UBS AG said Feb. 18. Annual contract prices were set at
about $129 a ton for the year ending March 31.
MCS, described as a
Mongolian private consulting company on Energy Resources Web site, owns more
than half of the miner, Gansukh said, without giving specific details. Other
shareholders include the European Bank for Reconstruction and Development which
invested up to $30 million last year.
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