More mining companies 'to list in S'pore'

Six readying for listing following clearer SGX rules, retail investor interest: Consultants

At least six mining-related companies are likely to list in Singapore over the next 12 months despite the plunge in commodity prices, according to a mining consultancy.

It helps that there are clear regulations from the Singapore Exchange (SGX) and increased retail investor interest in the mining sector, the company said.

Commodity prices have taken a plunge in the past year, dragged down by over-capacity and a slowdown in the Chinese economy - a slump which could continue for some time.

In fact, Mr Patrick Smith, managing director of mining consultancy AMC Mining Consultants, said it would be five to 10 years before the market sees a sustained rise in commodity prices .

"I think it will be somewhere five years to 10 years from now before we see significant growth in all the commodity prices," he said.

But the pessimism has not affected mining companies' appetite for listing here.

Since 2011, 14 companies have listed on the Singapore Exchange, adding to the three before, Mr Foong Chong Lek, director for listings, and marketing and business development at the SGX, noted.

Just this year, there have been two coal companies from Indonesia which listed on the SGX, noted Mr Mark Berry, principal geologist at AMC Mining Consulting (Singapore). And at least six mining firms are in various stages of preparing for a listing here in the next three to 12 months, said Mr Berry.

Mr Smith said the firm set up an office here in June to work more closely with sponsors of mining companies which intend to list, and banks which intend to finance mining companies.

One of the main reasons for the rising interest among mining companies to list here is the clearer listing regulations on the mining and oil gas sector implemented by the SGX in 2011 and 2013.

These rules made planning for listing easier. Before that, there had were no listing rules specifically applying to this sector, said Mr Smith.

Mr Berry said retail investors here started becoming more interested in investing in the mining sector during the mining boom of the mid-2000s.

"Whenever an industry generates profits, investors become interested," he said.

Mr Smith said sources of demand for commodities more than five years from now could come from India, as well as the cumulative needs of smaller countries in the region that are growing, such as Vietnam.

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A version of this article appeared in the print edition of The Straits Times on November 03, 2015, with the headline More mining companies 'to list in S'pore'. Subscribe