BOC International Holdings Ltd., the investment-banking unit of China's second-biggest lender, aims to double to a record the number of initial share sales it arranges for mining companies next year in Hong Kong.

The bank already has "three to four mining deals in the pipeline for next year," Chief Executive Officer Wang Yan said Nov. 13. The companies are "major industry players" in coal and base metals, he said, declining to name them.

Mining stocks outperformed the benchmark Hang Seng Index on the Hong Kong stock exchange as commodities prices reached records this year. The share sales may increase the sector's market value by 33 percent in the next 12 months to $18 billion, said investment banker Warren Gilman.

"It is a very interesting and relatively young sector in its evolution," said Gilman, managing director of CIBC World Markets' Asia-Pacific in a presentation at a mining conference in Beijing on Nov. 14.

Chinese banks have raised more than $40 billion from initial public offerings since the middle of last year. Hong Kong-based BOC International was the biggest underwriter of IPOs this year on the city's exchange, ranked by the amount raised and by the number of offers, according to Bloomberg data. It's a unit of Beijing-based Bank of China Ltd.

Hunan Non-Ferrous Metals Co., China's biggest zinc producer, and Lingbao Gold Co. were the only two miners listed in Hong Kong this year and both sales were arranged by BOC International. They raised a combined $340 million, accounting for less than 5 percent of the total arranged by the bank. It didn't arrange any mining deals in 2005.

Deutsche, JPMorgan

Shanxi Coking Coal Corp., a state-owned coal producer, plans to raise $800 million to $1 billion in Hong Kong next year, said bankers familiar with the plan Sept 26. The company hired BOC International, Deutsche Bank AG, JPMorgan Chase & Co. and Morgan Stanley to handle the sale.

Xinjiang Nonferrous Metals Group, a state-owned metals producer, aims to raise $200 million selling shares in Hong Kong, the Shanghai Securities News reported Aug. 8, citing people involved in the sale. Jinduicheng Molybdenum Group Co, the world's second molybdenum producer, also plans to sell stocks worth of $1 billion next year, bankers familiar with the plan said on Oct. 31.

BOC International may underwrite a total of 7 initial public offers in Hong Kong this year, Wang said. The company has completed 6 of them. China Communications Construction Group Ltd., which builds ports, roads and airports, aims to raise $1 billion selling shares in Hong Kong in early December, bankers said in October. BOC International, Merrill Lynch & Co. and UBS AG were hired to handle the IPO.

'Bargaining Power'

China's government is urging metal companies to merge with smaller rivals as it tries to create bigger producers to increase their bargaining power in price talks with raw material suppliers and be more competitive globally. Consolidation may also help industries such as steelmakers to cut excessive capacity and ease its reliance on power consumption.

"Consolidation is the theme of the mining industry," Wang said in an interview in Beijing. "It's a rarely good opportunity for Chinese mining firms to use the capital market to finance and then further consolidate. They will be able to boost resources, reserves and profitability."

Copper, zinc and nickel all reached records this year. The Hang Seng Index gained 27 percent this year, compared with a 14 percent gain in the Down Jones Industrial Average and 12 percent gain of the Standard and Poor's 500 Index. Shares of Hunan Non- Ferrous almost tripled and Lingbao Gold more than doubled since their debut this year.

Secure Resources

"The two mining deals are crucial to us as we accumulated valuable experiences and we are now better positioned to compete with others." said Wang, who joined the bank in March 2005 from the Industrial and Commercial Bank of China Asia Ltd.

China's government is encouraging such as Cnooc Ltd. and Aluminum Corp. of China Ltd. to secure resources overseas to feed demand for roads, bridges and ports amid an economy that grew 10.7 percent in the first nine months of the year. Anglo American Plc, Teck Cominco Ltd. and other global miners are developing exploration projects in China.

"This is an evitable trend for Chinese companies to go out of the border for resources. The capital flow will lead to consolidation of resources," said Wang, who has a PhD degree in Economics and an M.A in international law, both from Peking University. "The developed countries are pouring money to invest in developing countries where demand for the commodities is booming."