Stocks News
- Mining firm seeks US$800m HK IPO
Date: 17-Jan-2007 Sources: (Shenzhen Daily)
CHINESE metal firm Luoyang Luanchuan Molybdenum Group, which has the world's biggest molybdenum mines, plans to raise US$800 million in a Hong Kong listing next month, people familiar with the deal said yesterday.
According to market researchers Roskill Information Services, China is a major producer of molybdenum, a minor metal used for hardening steel. The white metal, a byproduct of copper, is valued for its anti-corrosive and strengthening properties. It makes up about 2 percent to 10 percent of stainless steel.
Luoyang Luanchuan Molybdenum Group, which has mine reserves of 2.06 million tons of molybdenum, plans to launch its initial public offering (IPO) in late February, sources said.
The Henan-based company will compete for investors with a slew of mining firms that are also seeking Hong Kong listings. Australian-listed gold-mining firm Sino Gold Ltd. is applying for a secondary offering to raise about US$100 million next month. West Mining, a Chinese producer of lead and zinc, plans to raise US$250 million in the first half. Jinduicheng Molybdenum Group, China's biggest molybdenum producer, also plans a US$1 billion IPO later this year.
Molybdenum prices hit a record high around US$39 a pound in June 2005, up from US$20 a pound in October 2004, as demand from fast-growing economies such as China and India accelerated. However, over the past year, prices have retreated as supplies have risen.
Australia-based Thor Mining's chief executive John Young expects molybdenum prices to halve over the next four years as mines in Latin America crank up production to take advantage of high prices.
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