The stock opened this morning at 23c, before slipping back to 20.5c in intraday trade.

The Perth-based company said it would acquire rights to coal, iron and other mineral projects and explore and develop these projects.

Coal Fe, which was formed in September last year, currently has two lead coal projects in Indonesia’s coal-rich regions, which it hopes to bring to production by 2008.

Chairman Allan Ryan said in the company’s prospectus that on raising the funds it would “proceed immediately with the exploitation of the exciting Kilisuci and Palapa projects and exploration of the Abadi project”

At the Kilisuci project, located in south Sumatra, Coal Fe has an exploration licence over 663 hectares of mining land and an exploration licence over 1337ha of adjoining land.

The project has a JORC standard inferred resource of 25 million tonnes and a measured resource of 1.9Mt.

The company’s targeted objective is to prove up an opencut mineable deposit at a waste-to-coal strip ratio of 8:1 or better.

At Coal Fe’s PSA coal project in East Kalimantan, the company holds an exploration licence over 1017ha and has an estimated inferred resource of 2.122Mt.

The company holds an exploration licence over 100ha at its third project – Palapa.

Indonesia has approximately 60.5 billion tonnes of coal reserves, of which 7Bt are considered proven. Approximately 39.2% of these proven reserves are located in Sumatra, primarily in the south, and 60.8% in Kalimantan, the company said.

“The board believes that as a consequence of the increase in freight rates in 2006, which doubled in comparison to 2005, coal exports from Indonesia will dominate the market in East Asia,” Ryan said.

Ryan added that Coal Fe would utilise any uncommitted funds from the float to engage in coal trading.

As well as acquiring the mining rights to coal projects in Indonesia, the company is also willing to consider acquisitions of similar projects in Australia and elsewhere.

For its IPO, the company offered up to 25 million shares at 20c.