The Mongolian government is pressing ahead with an initial public offering of shares in the Tavan Tolgoi coal deposit, an immense reserve in the Gobi Desert that has an estimated five billion to six billion tonnes of coal, mostly coking and thermal.
Bankers said the deal is most likely to take place in Hong Kong, a natural market for Mongolian mining assets given the landlocked country's proximity to mainland China.
Investment banks have been asked to pitch for roles advising on the offering by January 31, said people with knowledge of the situation.
The site could be the world's second-largest coal deposit, after the Shengli field in China, according to data provider Raw Materials Group.
Asian investment bank Eurasia Capital estimates the Tavan Tolgoi deposit holds 5.1 billion tonnes of coal that could be mined continuously for 200 years.
One investment banker based in Mongolia said Tavan Tolgoi would be a much bigger listing than that of Mongolia Mining, which raised nearly HK$5 billion on the Hong Kong stock exchange last October. Mongolian Mining, which mines coking coal from a deposit in the South Gobi Desert, now has a market capitalisation of almost HK$40 billion.
An official in the Mongolian State Property Committee said in a telephone interview that the government was pushing for the float to happen before May or June in Hong Kong, London or Mongolia. 'The IPO for the Tavan Tolgoi deposit is in preparation,' he said.
