(EnergyAsia, April 5 2013, Friday) — With coal prices on the mend, SouthGobi Resources Ltd, a Canadian coal mining company controlled by UK’s Rio Tinto Group, said it will resume production at its flagship Ovoot Tolgoi mine in Mongolia.

The Vancouver-based company said the mine, which has been idled since last June, is expected to produce a total of 3.2 million metric tons of semi-soft coking coal for the rest of this year.

“Production has been fully curtailed since the end of June 2012 and the company has used this period of halted production to adapt to the new market environment and restructure and reposition its Mongolian business. Operations will resume in a conservative and therefore cost effective, cash positive and sustainable manner,” said SouthGobi, which is controlled by Rio Tinto’s 51%-owned unit Turquoise Hill Resources Ltd of Canada.

The company also endured a rough patch with the Mongolian government which swiftly stopped its proposed US$926 million takeover by China’s state-owned aluminum company Chalco early last year.

The Toronto-listed company, which owns four coal projects in Mongolia, three development projects and a mineral exploration licence, said the government also suspended its Ovoot Tolgoi exploration and mining licences. Almost all production from its Ovoot Tolgoi mine, which holds an estimated 175.7 million metric tonnes of coal reserves, is sold to China.