Chinese aluminium group launching biggest global IPO to date

Mining companies around the world have so far in 2009 raised nearly USD 60bn, all of it completely outside any banking system/s, but to date none of the capital has come in by way of an IPO (initial public offer), which entails a new listing. Today China Zhong Wang, the aluminium division of holding company Liao Ning Zhong Wang Group, started marketing for its planned 8 May listing in Hong Kong, that would involve raising up to the equivalent of USD 1.6bn, equal to 26% of its enlarged capital.

If the stock lists at that valuation, its full value would be USD 6.6bn, which would rank China Zhong Wang as the third most valuable listed specialist aluminium stock, after

Chalco, with a market value of USD 15.6bn, and Alcoa, which currently carries a market value of USD 9bn. Russia's Evraz, which, like Alcoa, tends to rank itself as the world's biggest aluminium entity, remains unlisted. Then again, Rio Tinto Alcan markets itself as "the global leader in the aluminium industry".

Should China Zhong Wang succeed in its IPO, at the kind of price level it is suggesting, this would be the world's biggest IPO in the year to date, across all global equity sectors. Aluminium, however, is the least recovered of the base metals, given a stubborn composite refusal by the global sector to amend supply in line with changed demand conditions.

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