IPO to fund mining rights

Hunan Nonferrous Metals, China’s largest antimony and zinc producer, plans to spend the US$200 million expected from its IPO on mineral exploration and mining rights. It is thought Hong Kong-listed Jiangxi Copper and Aluminum Corp of China (Chalco) will be used as a yardstick for a competitive offering price. Jiangxi Copper is trading at 8.97 times forecast earnings, and Chalco at 9.53 times. Hunan Nonferrous Metals had a net profit of US$69 million in 2004, including a gain from acquisitions.