Mongolia to control investment by foreign state owned firms in strategic assets by new law

The Mongolian parliament is discussing a law that will control investment by foreign state owned firms in strategic assets says unofficial source. This new law could potentially stop Chalco’s bid to buy a controlling stake in SouthGobi Resources Ltd.

The source says that in near time, the Mongolian Parliament’s plan to change the law is to ensure that acquisitions by foreign state-owned firms in strategic firms, such as resource companies or mines, will go through a government vetting process akin to that practised in Canada and Australia.

Currently, there is no shareholding limit for foreign state-owned firms looking to invest in Mongolia’s strategic firms.

Early last month, China’s state owned Chalco, biggest aluminum producer by output in China said it had agreed to buy a controlling stake in Mongolian coal miner SouthGobi Resources from Canada’s Ivanhoe Mines in a deal worth US$923 million.

SouthGobi, which listed in Hong Kong two years ago, is 66%-owned by Ivanhoe, and 14% by Chinese sovereign wealth fund, China Investment Corp. Two weeks after that acquisition was announced, SouthGobi said in a statement that the Mongolian government had suspended some of its mining licences on national security concerns following Chalco’s bid to take control of the Mongolian miner.


If Mongolia is an independent country, Mongolians take a control over those money hungry foreign investors who leave only a big contaminated holes around the whole world!

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