Guildford Coal Mulls ASX Listing Of Mongolia Coal Unit
August 23 2011 - 7:14PM
Dow Jones News
Guildford Coal Ltd. (GUF.AU) said Wednesday it is looking at
listing its Mongolian coal assets separately on the Australian
Securities Exchange, the latest in a string of miners vying to take
advantage of rising investor interest in the landlocked North Asian
country's resources.
The company said it has retained UBS AG (UBS) to advise on a
possible listing of Terra Energy, which is expected to produce its
first coal from the South Gobi project in Mongolia in the first
half of next year. It didn't say how much it intends to raise via
the proposed initial public offering, or IPO, of Terra Energy,
which it controls with a 70% stake.
Guildford, which also owns coal assets in Australia's Queensland
state, said a mine with an annual production capacity 2 million-3
million metric tons of coal could be built at the South Gobi
development site.
Its resource is located around 30 miles east of two operating
mines, including one owned by Hong Kong-listed SouthGobi Resources
Ltd. (1878.HK), producing a combined 5 million tons of coal
annually that is sold to customers in northern China's Gansu and
Shanxi provinces and Inner Mongolia region.
In a statement, Guildford said the South Gobi project contains
both high-quality coking coal used in steelmaking and thermal coal
used in power generation. It expects to firm up resources in the
October-December period.
"The Guildford board believes that the potential Terra Energy
IPO on the Australian Securities Exchange will provide investors
with an excellent opportunity to invest in a portfolio of quality
Mongolian projects with near-term production potential," Craig
Ransley, Guildford's chairman said.
Interest in Mongolia's resources is rising among western mining
companies, which have found themselves increasingly locked out of
many of the biggest deposits in China and neighboring Russia by a
regulatory environment that favors local firms.
In July, the Mongolian government selected a consortium
including U.S. coal company Peabody Energy Corp. (BTU) to develop
the Tavan Tolgoi deposit, one of the world's largest untapped
reserves of coking coal.
Rio Tinto PLC (RIO) and Ivanhoe Mines Ltd. (IVN) are also
investing billions of U.S. dollars in Mongolia to develop the Oyu
Tolgoi copper deposit.
-By David Winning, Dow Jones Newswires; +61-2-82724688;
david.winning@dowjones.com
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