In what will be Mongolia’s largest ever initial public offering, Beren Group subsidiary Beren Mining will issue 30% of its shares to the public this quarter. Mongolia’s Financial Regulatory Committee has approved the offering of more than 522 million shares which is hoped to raise almost US$95 million for the company.
Beren says proceeds will go towards establishing an iron ore processing factory as well as new infrastructure, office buildings and workers’ housing. The project will be based on the iron ore mine in Tuvshruuleh soum of Arhangai province. Beren’s factory will have annual production capacity of 250,000 tonnes of iron ore concentrate with an average 63-67% iron content.
Beren Mining was established in 2005 with 100% Mongolian ownership and investment. Its iron ore beneficiation plant was built and commissioned in 2007. Beren owns a world-class iron ore deposit in the same area, with geological survey and drilling works conducted on the deposit since 1954 by various Soviet and Mongolian teams. Major studies have been completed between 1977 and 1979 and 2006 and 2009.
The company’s operations are concentrated in Tuvshruuleh county which is 385km west of Ulaanbaatar. The area is directly connected to the high voltage main electricity grid and major cities by paved roads which are crucial for expansion of operations.
“The company’s short term plans are to expand its annual beneficiation capacity to 500,000 tonnes and to construct and commission a direct reduced iron plant of 300,000 tonnes capacity by 2014,” says Beren Group’s president B Munkhtur.
He says the company prides itself on blossoming into a successful industrial and commercial business since its humble beginnings as an engineering company 20 years ago. “Our company has successfully engaged in activities in the sectors of food, agriculture, light industry, technology, mining, metallurgy, construction and real estate and made real contributions to the development of Mongolia by capitalizing on our own internal capabilities. In certain sectors of the domestic economy, we have become the pioneers and the guiding force bringing in new developments and new technologies.”