(EnergyAsia, August 3 2012, Friday) — China’s state-owned Chalco said it has extended its offer to acquire a majority stake in Mongolian coal miner SouthGobi Resources Ltd for the second time.
The aluminium producer, a major customer of SouthGobi, is facing strong resistance from Mongolia which is wary of China’s growing role in its economy and possible stranglehold of its natural resources sector.
Chalco, or the Aluminium Corp of China Ltd, has made known its intention to acquire up to 60% of the common shares of SouthGobi, which is listed on the exchanges of Toronto and Hong Kong, since April. Chalco has offered to pay US$926 million or C$8.48 a share for SouthGobi which owns and operates coal mines in Mongolia, mostly for export to China.
Chinalco thought it had the deal sewn up when it agreed to acquire SouthGobi’s majority stake held by Canada’s Ivanhoe Mines. None of the players had anticipated the strong backlash from the Mongolian government, which immediately announced it is looking to pass new laws to limit foreign ownership and role in the country’s resource sector.