Energy Resources LLC, a closely held coking coal producer in Mongolia, is considering an initial public offering in Hong Kong or London, its majority shareholder has said. “It’s just an idea at the moment, but we are looking to raise funds and an overseas listing is a good way to raise the profile of the company,”  A. Gankhuyag, managing director of MCS Holding LLC, has said. No bankers have been hired yet.

Energy Resources is doubling coking coal production this year as global demand for the steelmaking ingredient increases with the economic recovery. The company “knows the ability to raise money domestically is limited so it needs to look abroad to raise funds,” said  Masa Igata, chief executive officer of Frontier Securities which advises investors on Mongolia. Energy Resources may need “at least several hundred million dollars” as part of a plan to raise annual output to 10 million metric tons in a few years, Igata said.  Gankhuyag declined to comment on how much the company is seeking to raise in the possible share sale.

The company operates one pit at Ukhaa Khudag in the south of the country, which produced about 1.8 million metric tons of coking coal last year, Financial Director G. Baterdene said output may rise to as much as 4 million tons this year. MCS, described as a Mongolian private consulting company, owns more than half of Energy Resources. Other shareholders include the European Bank for Reconstruction and Development which invested up to USD30 million last year.