Coking coal miner Bounty Mining has made its debut on the ASX today — trading at a 23 per cent premium to its initial public offer price of 35c.

Bounty (ASX:B2Y) opened at 38c and traded as high as 43c just after it lit up the boards at 11am AEST. By 11.40am 6.6 million shares worth around $2.6m had changed hands.

The company witnessed significant demand from investors well above its targeted $18 million IPO.

Bounty is the only purely coking coal producer listed on the ASX.

Chief Gary Cochrane said the strong interest in Bounty’s IPO was due to where coal is in the cycle.

“We’re probably two years into the next bull run,” he told Stockhead.

“Although we’re a long way in to the next cycle, there still has been a really slow uptake, as there often is, for not only investor confidence, but for new supply.

“And it could easily be more than two years, if not three years before there is any new significant supply – and the demand is steadily growing.”

Coking coal is vital in steel production and global crude steel production is continuing to rise because of continued growth in countries like India, Vietnam and China.

Bounty has built up a portfolio of hard coking coal projects in the coal-rich Bowen Basin and Laura Basin in Queensland.

The Bowen Basin, a 60,000 sq km area in central Queensland, hosts Australia’s biggest coal reserves and virtually all of the known mineable prime coking coal, according to the Bowen Basin Underground Geotechnical Society.

The company began mining at its Cook Colliery mine in the Bowen Basin in January and says it is not far from being cash flow positive.

“We’ll be cash break-even pretty quickly and virtually a couple more payments and we own all the assets,” Mr Cochrane explained.

Bounty’s target annual production rate is 2.2 million tonnes, which the company expects to reach around mid-next year.

Production is slated to reach 800,000 tonnes per annum in about two months.