Monday, 16 April 2012

Southgobi Resources says Mongolia suspends some coal licenses

SouthGobi Resources (TSE:SGQ) said Monday that the Mongolian government has suspended exploration and mining licenses for its Ovoot Tolgoi coal mine following a buyout bid by Chinese aluminum giant Chalco.
The Canadian coal miner said it has not received any official notification. However, if it receives one, it may need to suspend operations until an injunction is granted, the company said.
In early April, Aluminium Corp of China - known as Chalco - said it would buy Ivanhoe Mines' (TSE:IVN)(NYSE:IVN) SouthGobi stake in a deal worth as much as $925 million.
SouthGobi, which sells metallurgical and thermal coal mainly to customers in China, said the suspension by the Mineral Resources Authority of Mongolia is with regard to the proposed stake buyout.
The suspension would be initiated to allow the government to review the proposed change of ownership, the company said in a statement.
SouthGobi has requested that Ivanhoe and Chalco discuss the proposed deal with the Mongolian government. It has also informed Rio Tinto (NYSE:RIO), which has a 51 percent stake in Ivanhoe.
SouthGobi owns four coal projects in Mongolia, three development projects and a mineral exploration license. It said it has no reason to believe its licenses are not in good standing.
In January, the coal supplier said it sold more than four million tonnes of coal in 2011, 58 percent more than it did in 2010.
In the fourth quarter, the company produced 1.34 million tonnes, resulting in full year 2011 output of around 4.57 million tonnes - up 64 percent from a year earlier.

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