Bankers to brave -30C to pitch for Mongolian mine
Sunday 30 January 2011
More than 20 of the world's biggest investment banks will next week to pitch for roles on a potential $8bn London listing of a state-owned Mongolian coal mine.
Bankers from HSBC, Deutsche, Credit Suisse, Citi and Macquarie are among those who will submit written proposals for the privatisation of Tavan Tolgoi. Face-to-face presentations will take place between 10 and 15 February in the Mongolian capital, Ulan Bator, where temperatures fall below -30C at this time of year.
"This is a fantastic, high-quality, metallurgical coal asset for the steel industry," said one banker. "The issue is infrastructure to get the coal out of the landlocked country. The presentations will be in Ulan Bator, where you really have to be brave to go in February."
Banks will submit options to list the coal group in either Hong Kong or London. Some are likely to suggest a dual listing, perhaps with London – the financial capital of world mining – trading the bulk of the shares. Up to six banks are expected to win roles on the flotation.
The Mongolian government prepared for a listing last month when it added Peter Bacchus, one of mining's elite dealmakers, to its board. The Morgan Stanley mining boss is currently on gardening leave before joining Jefferies as head of European investment banking later this year.
A listing is expected to take place by the first half of next year. Up to 25 per cent of the coal group's shares will be listed, raising up to $2bn and valuing Tavan between $5bn and 8bn.
The mine's name means "five heads", referring to the number of small hills on the landscape around the 6 billion tons of coal.
Another planned mining privatisation is Alrosa, Russia's biggest mining company. It is understood that JP Morgan, Morgan Stanley and VTB are likely to land the main advisory roles on a flotation that could raise $2.3bn.
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