Iron ore mining company Hengshi Mining Investments made a poor trading debut on the Hong Kong Stock Exchange this week.

 

The company lost 3.8% on its first day of trading on Thursday and slid again on Friday, ending the week at HK$3.06.

 

Hengshi is 75%-owned by a family trust controlled by Chinese billionaire and the company's chairman Li Yanjun and his son Li Ziwei. The family's investment is worth around $444 million.

 

Hengshi is incorporated in the Cayman Islands, with three principal operating subsidiaries,Jiheng Mining, Jingyuancheng Mining and Xinxin Mining and four producing iron ore mines located in Laiyuan County, Hebei Province, China's iron ore and steel hub.

 

Forbes reports the Li's are not the only billionaires invested in the iron ore miner and according to the company’s IPO prospectus, "Hong Kong billionaire Francis Choi bought $20 million of shares and Chow Tai Fook Nominee Ltd., owned by Hong Kong billionaire Cheng Yu-tung, bought $15 million of shares in Hengshi’s IPO. Chinese-Thai billionaire Chanchai Ruayrungruang’s Reignwood International Investment also purchased $20 million of Hengshi stock."

 

Iron ore prices has held up well this year despite predictions of a slump as Australian and Brazilian producer up capacity with the benchmark import price of 62% iron ore fines at China's Tianjin port holding around the $130 a tonne level.

 

Domestic Chinese iron ore miners which have to deal with high costs and low quality ore have been losing ground to the big four exporters Rio Tinto, BHP Billiton, Vale and Fortescue which control close to 70% of the 1.1 billion tonne seaborne trade in the steelmaking ingredient.