UPDATE 1-Indonesia coal miner Adaro plans up to $500 mln IPO

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JAKARTA, March 11 (Reuters) - Indonesia's second-largest coal producer, PT Adaro Indonesia, plans to raise between $400-500 million via an initial public offering in around September, investor Sandiaga Uno said on Tuesday.

Uno, who runs Indonesian investment fund Saratoga Capital, which controls 32 percent of Adaro, told Reuters that the Adaro planned to use the proceed to finance expansion and repay debt.

"It will be in the fourth quarter, around September. We are aiming at between $400-500 million from it," Uno said, adding that UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) had been appointed as the lead underwriter for the offering.

Rising global demand, combined with falling exports from China and South Africa as well as port and rail bottlenecks in Australia, have driven coal prices higher, as well as share prices of coal firms.

Uno, who runs Saratoga with another Indonesian investor Edwin Soeryadjaja, said the company had not decided how much of the funds would be used to repay debt or on expansion. The number of shares to be offered also had not been decided.

Last year, a market source told Reuters that the company may offer between 25-30 percent of its share capital in the IPO, which could value the entire company as high as $2 billion.

Adaro is expected to produce 42 million tonnes of coal this year, up from an estimated 40 million last year, recent industry data shows.

The company comes second after PT Bumi Resources Tbk BUMI.JK, which is owned by the family of Indonesia's chief social welfare minister Aburizal Bakrie.