Indonesian coal producer PT Bayan Resources said it plans to sell up to 31.6 percent of itself via an initial public offering next month to help finance expansion plans at a time of record high coal prices.

The company has not set the price range for the offering but a source close to the deal said on March 3 it plans to raise 5 trillion rupiah ($537.8 million) in an initial public offering.

PT Trimegah Securities Tbk TRIM.JK will underwrite the IPO. The offer period is set for July 29-Aug. 1 after the book-building period from July 2 to July 21. The firm plans to list its shares on the Indonesia Stock Exchange on Aug. 8.

The proceeds from the IPO will be used to finance acquisition of a floating transfer station, to boost working capital and expand its coal business, Bayan said.

Bayan Resources is the holding company of coal miner Gunung Bayan, which is expected to produce 9 million tonnes of coal this year, the firm said in a statement. That makes it a relatively small player in Indonesia.

Strong demand for coal, particularly from China and other Asian economies, has pushed prices to record peaks this year, prompting miners to increase production.

PT Bumi BUMI.JK, Indonesia's largest coal company, produced 56 million tonnes in 2007 and has said it expects its output to rise by 11 percent this year.

Bumi has a stock market value of $16.9 billion.

Another source said in March Bayan's most valuable asset is its port facility which he estimated accounts for about $1 billion of the company's total value and which he said could be rented out to other miners in the area to generate additional income.