SouthGobi Signs Cooperation Agreement With Aluminum Corporation of China Limited (CHALCO) and Receives Notification of CHALCO’s Intention to Make a Proportional Take-Over Bid.
SouthGobi has been informed that CHALCO intends to make a take-over bid for up to 60% of the issued and outstanding common shares of SouthGobi at C$8.48 per share (“Proportional Offer”). SouthGobi has also been informed by its 57.6% major shareholder, Ivanhoe Mines Ltd. (“Ivanhoe”), that Ivanhoe has signed a lock-up agreement with CHALCO, committing to tender all of its shares held or thereafter acquired by it during the Offer Period of CHALCO into the Proportional Offer.
M.Ariunbat is working as the temporary head of the Mineral Resources Authority of Mongolia and was interviewed regarding the SouthGobi Sands licenses issue.
Q: The Southgobi’s deposit has become a popular subject recently. Are large Mongolian deposits becoming more dependant on international companies? What does it say on the Mongolian law?
M.Ariunbat: We have to understand that we cannot manage this takeover by the Minerals law of Mongolia. Law on limiting strategic investment is initiated and the takeover can be managed by this law. We also made amendment to the Minerals law to include this issue. It means mining license holders needs to get permission from the government to sell or trade the mining deposit.
Q: Does the current law include this?
M.Ariunbat: It does not. To add to this, we have suspended all the special mining and exploration licenses of SouthGobi Sands.
Q: What is the reason for this suspension? How long will it last? How will it effect Mongolia?
M.Ariunbat: It is related to the parent company SouthGobi Energy and its change in the main shareholder. All the licenses are suspended. The suspension will last until the Government of Mongolia and the State Great Khural makes any assessment on the issue. The suspension will not effect the Mongolian economy as a whole because licenses of only one company is suspended.
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