By Chen Aizhu
BEIJING, Oct 23 (Reuters) - Canada-listed mining group SouthGobi Energy Resources is likely to launch its initial public offering in Hong Kong in the first quarter of next year, a senior company executive said on Friday.
Alexander Molyneux, CEO of the company, told a forum in Beijing that his company would also seek other sources of funding for expenditure in coming years. He did not elaborate on the size of the planned IPO.
SouthGobi had hired Citigroup and Macquarie for a $200 million-$250 million initial public offering in Hong Kong, a source familiar with the matter told Reuters in June.
"Now we have really identified the geological endeavour, and we have established access to a market. Now it's time to move into a much heavier capex spending environment," he said.
Molyneux said his company's total expending in the next few years would total approximately $800 million. The money would be used to further develop its flagship coal mine, Ovoot Tolgoi in Mongolia, and also to build railways for exports to China as well as to accelerate other exploration programmes.
SouthGobi expected coal output at Ovoot Tolgoi to quadruple from the current level of 2 million tonnes to 8 million tonnes by 2012, the CEO said.
About 60 percent of coal production would be high quality coking coal, and the company would target western China as its main export market, he added.
The coal mine was 40 kilometres from China's northern border and had total coal reserves of 400 million tonnes in Mongolia, he added. (Reporting by Chen Aizhu; Editing by Chris Lewis) (eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging: eadie.chen.reuters.com@reuters.net))