Mainland iron ore miners plan HK listings
Updated: 2009-07-21 07:39
By Liu Yi Yu(HK Edition)
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HONG KONG: Mainland iron ore miners have revived their plans of share sales in Hong Kong as the appetite for initial public offerings in the city picks up again.
Iron ore miner Lung Ming plans to list its shares this year to raise up to $1 billion, Reuters reported yesterday, citing sources with direct knowledge of the matter.
Lung Ming aims to raise between $500 million and $1 billion from the share offering, which is likely to take place in the fourth quarter. A successful listing of Lung Ming would also guarantee the first investment exit of private equity firm Hopu Investment Management, which manages a $2.5 billion fund.
Lung Ming, which owns and operates an iron ore mine in Mongolia, is controlled by Hong Kong Lung Ming Investment Holdings. Hopu, a private equity fund founded by Goldman Sachs' Chinese partner Fang Fenglei, and Singapore's sovereign fund Temasek Holdings jointly invested $300 million in Lung Ming last year.
Lung Ming owns several projects in the Eruu Gol, a major ore production area in Mongolia and engages in resources exploration, exploitation, production and trading.
The company mainly focuses on the domestic market.
Lung Ming submitted a listing application last year and was expected to go public before the end of 2008. However, the plan was aborted owing to the bleak market sentiment during the financial crisis.
Morgan Stanley, Credit Suisse, UBS and Goldman Sachs were Lung Ming's joint underwriters last year.
Meanwhile, another iron ore miner China Vanadium has also revived plans for its Hong Kong share sale. It aims to raise up to $200 million in the last quarter of this year at the earliest, or early next year.
The Sichuan-based company cancelled its listing early last year when demand for iron ore, a raw material for steelmaking, weakened amid the global recession.
Iron ore spot prices touched a nine-month high last week as Goldman Sachs forecasts world steel prices will rise at the end of this year after a year-long ebb.
The mainland is the world's largest iron ore importer and consumes more than half the global traded ore. Driven by massive construction projects, steel demand on the mainland is likely to reach 427 million tons this year, according to the latest report by KPMG.
(HK Edition 07/21/2009 page4)