China Molybdenum, the mainland’s largest molybdenum miner, plans to raise up to $883 million (almost RMB7 billion) in an initial public offering. Luoyang-based China Moly will sell 1.08 billion new shares, or 25% of its enlarged share capital.

Based on 2007 earnings the estimated price range values the company at between 11 and 14 times earnings.

China Moly operates one of the largest pure molybdenum mines in the world. It is estimated to have 498,000 tonnes of molybdenum reserves and 506,000 tonnes of tungsten reserves. Both molybdenum and tungsten are used as alloys to harden steel and are in strong demand by China’s rapidly growing stainless steel industry in particular. The illustration is of a slab of the stuff which is called by most miners MollyBeDamned.

This IPO makes China Moly the third largest Hong Kong IPO so far this year after China Citic Bank and real estate developer Country Garden.

The money raised from the IPO will be used partly to set up its own processing facilities to recover tungsten from the raw material left over after extracting the molybdenum.

Prior to the listing, the company is 52% owned by the government of Luanchuan County and 48% by two individuals through an investment company called Cathay Fortune Corp.
Source: Finance Asia