Aluminum Corp. of China (Chalco) Monday agreed to buy a controlling stake in Mongolian coal miner SouthGobi Resources (TSE:SGQ) from Ivanhoe Mines (TSE:IVN)(NYSE:IVN) in a deal worth as much as C$925 million.
has agreed to tender its entire 57.6 percent stake in SouthGobi to the
Chinese aluminum giant's offer to buy up to 60 percent of the Mongolian
miner at C$8.48 per share, a 28 percent premium to Friday's closing
"Depending upon the uptake of the offer by other
SouthGobi shareholders, Ivanhoe could receive up to approximately C$889
million from the sale of all of its shares in SouthGobi," Ivanhoe said
in a statement.
Chinese miners have been carrying out overseas
acquisitions of natural resources to feed the nation's growing energy
demands. It is the latest move by Chalco to diversify away from
aluminium following a $1.35 billion investment in the Simandou iron-ore
deposit in Guinea with Rio Tinto (NYSE:RIO)(LON:RIO).
Earlier this year, Ivanhoe Mines'
founder Robert Friedland said the company was considering asset sales
to raise funds to develop its giant Oyu Tolgoi copper mine in Mongolia.
will take up to 100 percent of SouthGobi's coal for up to two years and
help it get electricity to the site, under the agreement.
which owns the flagship Ovoot Tolgoi coal mine, is also developing
three other projects and plans to increase production to 6 million
metric tons this year from 4.57 million tons in 2011. Ovoot Tolgoi is
producing and selling coal to customers in China.