Chinalco Mining Said to Raise About $397 Million in IPOFox Hu
Chinalco Mining Corporation International raised about $397 million in an initial public offering in Hong Kong, two people with knowledge of the matter said.
The unit of China’s biggest aluminum producer sold about 1.76 billion shares at HK$1.75 apiece, the people said, asking not to be identified because the information is private. The shares were offered at HK$1.52 to HK$1.91 each, according to a prospectus for the IPO.
Chinalco Mining is raising funds with the Bloomberg World Mining Index down about 7.4 percent in the past year amid expectations of slowing growth in China, the world’s largest consumer of copper and iron ore. The company sold $240 million of shares, or more than half the total, to five cornerstone investors, including Rio Tinto Group and Trafigura Beheer BV, the prospectus shows.
Owned by Beijing-based Aluminum Corp. of China, the company plans to use the funds for its Toromocho copper project in Peru, and to buy and develop non-ferrous and non-aluminum projects, the sales document shows. Aluminum Corp., known as Chinalco, is investing in copper, coal, iron ore and rare earths as overcapacity and rising power costs shrink profit margins from aluminum smelting.
An external spokeswoman for Chinalco Mining declined to comment on the IPO price.
BNP Paribas SA and Morgan Stanley are among banks managing the sale. Chinalco Mining plans to start trading on Jan. 31, the prospectus shows.
The IPO is the largest first-time share sale by a mining company in Hong Kong since Inner Mongolia Yitai Coal Co.’s $903 million offering in July 2012. Yitai is up about 3 percent since its offering.
Cornerstone investors get guaranteed allocation of the IPO in return for a pledge to hold their stock typically for six months.