Coal miner Riau Bara Harum eyes $500 mln IPO-sources

* Looking to sell up to 25 pct stake in H2 - sources

* Expects market cap of $1-$2 bln - sources 

Indonesian coal miner Riau Bara Harum aims to raise up to $500 million from an initial public offering (IPO) in the second half of the year, to tap investor demand in the world's biggest thermal coal exporting nation, sources with direct knowledge of the deal told Reuters on Thursday. 

The IPO would offer investors another opportunity to tap into high calorie coal assets, and could be the biggest thermal coal listing in the country for three years since PT Bayan Resources raised $529 million in 2008. 

Riau Bara Harum, which has an estimated 200 to 300 million tonnes of reserves with a calorific value of between 6,100 to 6,200 kcal/kg, owns more than 24,000 hectares of mining areas in Riau on Sumatra island, said one of the three sources. 

"The firm aims to raise up to $500 million in order to expand its business as it has very little production at the moment," said another of the sources briefed on the IPO, adding that the firm expects to sell a 20 to 25 percent stake. 

Local brokerage Ciptadana Securities has been tapped to become an underwriters, one of the sources said, but officials at Ciptadana declined to comment. 

PT Sumber Bara Lestari owns a 95 percent stake in the firm while the rest is owned by PT Karunia Tambang Mandiri, according to Indonesia's 2008/2009 coal book published by the Indonesian coal mining association. 

Lawrence Barki is listed as one of the company's director, the book reported. The Barki family also control another listed coal firm, PT Harum Energy , which raised $320 million in an IPO last year. 

However, sources involved in the deal said the Barki family exited ownership of Riau Bara Harum in 2006. 

The IPO would also follow a listing by thermal coal miner PT Berau Coal in August that raised over $150 million, and by coking coal miner Borneo Lumbung Energi & Metal that raised $632 million in November. 

More private and state-owned firms are coming to the market this year to tap investor demand for Indonesian assets, though worries over inflation have driven the stock market down 9 percent this year after a 46 percent rally in 2010. Source: Reuters