Chinese listing on the cards

NEWLY-established Chinese mining group Heilongjiang Longmei Mining (Group) is positioning itself for a listing in Hong Kong later this year.

Staff Reporter

The 95% state-owned group consists of four major coal mining businesses - Jixi, Hegang, Shuangyashan and Qitaihe coal companies – based in Heilongjiang Province where proven coal reserves amount to 22.4 billion tons.

Heilongjiang State-owned Assets Regulatory and Administration Commission, is the largest shareholder of the group.

The preliminary goal is to reduce the State's stake to 70% and eventually to 51%. Once listed the entity is expected to be valued at US$1.2 billion.

The new group has already signed a co-operative agreement with Japanese company Itochu Corporation in which it has won the right to subscribe for Longmei's shares after the company's listing.

Each of Longmei's four coal companies has an annual production capability of more than 10 million tons and the new conglomerate is able to produce more than 50 million tons of coal annually.

Longmei wants to increase production levels to 100 million tons but it needs investment to fund the massive development.

Longmei's subsidiary - Heilongjiang Tongda Coal Sales Company - will manage Longmei's coal sales and recently opened four branches as collection points for all coal produced.

It has also established a branch in Liaoning Province to control coal exports and seek opportunities on the international market.

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