Source: Reuters, Bloomberg                  Date: 30 September, 2010

Mongolian Mining Corp, Mongolia's largest privately held domestic producer and exporter of coking coal, raised its initial public offering price range by 3 percent, according to a term sheet, in a sign investors are hungry for exposure to Mongolia's emerging resources sector. The coal miner now plans to raise up to USD702 million from the IPO instead of an earlier plan of up to USD681 million, according to the term sheet. Mongolia Mining will be the first company listed in Hong Kong to be fully based and operated in Mongolia.

Citigroup Inc. and JPMorgan Chase & Co. are managing Mongolian Mining’s IPO. The shares are being priced at 11.6 times to 13.6 times the company’s forecast 2011 profit and 7.6 to 8.9 times its estimated 2012 earnings. Of the proceeds, about 50 percent will be used to improve transport links and infrastructure, Chief Executive Officer G. Battsengel told a press briefing in Hong Kong. About 40 percent will go toward exploration and acquisitions, he said.

Mongolian Mining’s IPO will be the biggest on record by a company from the landlocked Asian nation. The stock being sold represents about 20 percent of the company, which would give Mongolian Mining an estimated market capitalization of USD3.5 billion. “Receptions should be positive for such stocks as coking coal is scarce compared with thermal coal,” said Lawrence Lau, an analyst of Bank of China (Hong Kong) Ltd. “The market sentiment has improved with people taking on more risk.”

Mongolia has drawn serious attention from global investors and Mongolia's domestic companies are seeking foreign capital to help them expand, and the government is trying to connect local companies and its stock market with the rest of Asia -- from Hong Kong to South Korea to Japan -- hoping to turn domestic names into regional or international brands.

Chinese coking coal logistics company Winsway -- which imports and distributes Mongolian coal -- is selling 990 million shares in a Hong Kong IPO that is scheduled to start trading on October 11. Winsway, partly owned by China-focused private equity fund Hopu Investments, accounts for about 65 percent of total Mongolian coal imported into China in 2009.