Mongolian Mining shares surge by a third as it ends five years of losses

Shares in Mongolian Mining surged as much as 34 per cent on Friday after it said it expects to report an interim profit for the first time in five years.

The positive earnings forecast comes on the back of a successful debt restructuring and soaring sales volume and prices of its mainstay product, coking coal.

The privately-controlled company, the largest producer of the steel smelting ingredient in the landlocked nation that heavily relies on China to buy its commodities, said it will post a net profit of between US$250 million and US$375 million for the six months.

That compares to a loss of US$61.7 million in the same period last year, and interim losses ranging from US$25.2 million to US$79.2 million the previous four years.

Its shares finally closed the day 14 per cent higher on Friday at 28.5 cents.

“Such profit is primarily attributable to improved coking coal market conditions [resulting in] increasing coal product tonnage sold and average selling price achieved,” Mongolian Mining said in a filing to Hong Kong’s bourse late on Thursday.

“The successful implementation and completion of the debt restructuring have resulted in an extraordinary gain,” it added without giving an estimate of the size.