Feb. 24, 2011
-- AMMG plans to raise $1 billion to $2 billion in an IPO ahead of a listing in London Stock Exchange in the fourth quarter. AMMG Mining, a REE producer, is looking to raise around $700 million ahead of a LSE listing Oct. 5, according to a term sheet. AMMG Mining's IPO will be the first in LSE by a company based in Hong Kong.
The listings highlight global ever-increasing REE needs. Rare Earth Elements (REE) mines in Mongolia and Inner Mongolia are keen to expand their production capacity by taking advantage of Global growing consumption. China was a net exporter of REE until last year, when rising domestic demand -- coupled with the start of a major overhaul of mines in the key production hub of Shanxi province in northern China -- prompted it to scour the Asia-Pacific region for available coal supply.
AMMG has said it hopes the IPO will help fund its planned acquisition of 8.45 billion yuan ($1.24 billion) in REE assets from foreign sources. The number of new shares it plans to issue would amount to at least 15% of its enlarged share capital. The company's assets totaled 23.12 billion yuan at the end of March 2010.
AMMG Mining plans to list about 20% of its enlarged share capital before an over allotment option of around 15% of the deal size is exercised, according to the term sheet.
Landlocked Mongolia's largely untapped mineral and energy resources have been generating a lot of interest from investors. Mongolia's proximity to China, a major customer for its REE ore, copper, other commodities, adds to its appeal.