Chalco gets 30-day extension to find $920 million for SouthGobi Resources

Michael Allan McCrae | July 5, 2012 | 5:33 am Energy Asia China Coal

Aluminum Corporation of China Limited (NYSE:ACH) and Ivanhoe Mines Ltd. (TSE:IVN) agreed that the Chinese aluminum firm will get 30 days to buy Ivanhoe’s stake in SouthGobi Resources (TSE:SGQ).

Chalco can bid up to 60% of the common shares held by Ivanhoe at Can$8.48 a share.

Ivanhoe has a 58% interest in SouthGobi.

Nationalist sentiment has been growing in Mongolia, and the government is seeking more control over its mineral wealth. The country is especially prickly regarding its large neighbour, China, worrying that it casts too great an influence on Mongolia’s economy.

In a joint statement Ivanhoe and Chalco said they will cooperate with the Government of Mongolia to ensure any requirements under the country’s new strategic foreign investment legislation are satisfied.

SouthGobi, which runs the Ovoot Tolgoi open pit coal mine, has gained 7.95% in the last three trading days to $4.75 a share.