Indonesia's Toba Bara eyes up to $400 mln IPO - sources

* Coal miner Toba Bara eyes valuation up to $2 bln - sources

* Toba Bara controlled by former minister and general Luhut Panjaitan

* Hires Morgan Stanley, CLSA, Citigroup, Mandiri as underwriters - sources 

Indonesian thermal coal miner Toba Bara Sejahtera plans to raise around $400 million via an initial public offering late this year or early 2012 to tap investor demand in the world's biggest thermal coal exporting nation, four sources with direct knowledge of the matter told Reuters. 

Indonesia's coal output is estimated to rise at least 10 percent annually over the next five years. Industry associations expect production to reach 340 million tonnes this year.

The offering by the miner, controlled by former industry minister and former army general Luhut Panjaitan, would be the third planned by Indonesian coal firms this year. 

"The firm is working with its advisers to prepare the IPO and is looking to launch it by the end of the year or early next year," one of the sources said. 

Another source said the firm, which produced around 6 million tonnes of thermal coal in 2010 from mines in Kalimantan and is planning to increase output to 9 million tonnes this year, is looking at a market valuation of up to $2 billion. 

Toba Sejahtera has appointed Morgan Stanley , Citigroup , CLSA Asia-Pacific Market and local brokerage Mandiri Sekuritas as underwriters, the sources said. 

The sources declined to be identified as the deal is not made public yet. All four underwriters declined to comment. Toba Bara was not available for comment. 

The IPO would also follow the listing of others thermal coal miners including PT Berau Coal in August 2010 that raised over $150 million and Harum Energy that raised $320 million in October. 

Riau Bara Harum, which is also among coal miners that aim to launch an IPO this year, plans to raise up to $500 million from an offering later this year, sources had told Reuters in February. Source: Reuters