MMC's rating is constrained by its small scale, single-product focus and limited cost competitiveness outside of northern China. However, MMC has flexibility in capex, which should give it sufficient buffer to continue generating free cash flows during a coal price downturn.

The proposed notes will be co-issued by MMC and its wholly owned-subsidiary, Energy Resources LLC, and guaranteed by most of its operating subsidiaries. The notes will constitute senior unsecured obligations of MMC as they represent the company's unconditional and irrevocable obligations. MMC intends to use the net proceeds from the proposed note issuance to refinance its existing secured notes and part of its perpetual notes. Concurrently, the company expects to fully repay the senior secured loan with cash generated from its Baruun Naran mine operations. The final rating on the proposed notes is subject to the receipt of final documentation conforming to the information already received.

MMC is relatively small compared with Fitch-rated coal mining companies globally in terms of revenue size, with revenue of USD590 million in 2018. MMC operates two mines with production concentrated in the Ukhaa Khudag mine in South Gobi.