Ivanhoe Mines Ltd.’s IVN -4.82% shares fell sharply Tuesday after Mongolian anticorruption authorities visited the head office of the Canadian miner’s coal operations in the Asian country.
SouthGobi Resources Ltd. 1878.HK +5.54% said that the Anti-Corruption Agency of Mongolia “formally requested information” from the offices of subsidiary SouthGobi Sands LLC.
Vancouver-based Ivanhoe owns 57.6% of SouthGobi Resources. Ivanhoe’s shares were down 7% at 9.66 Canadian dollars (US$9.73) in early trading. SouthGobi’s shares fell by 13% in Hong Kong.
SouthGobi said the decline was spurred by an attempt by the Mongolian government to limit foreign ownership of Mongolian strategic assets to 49% and the visit of anticorruption officers to its offices.
“SouthGobi has previously been advised this is in connection with an investigation into a third-party and has no reason to believe SouthGobi Sands LLC is itself the subject of any investigation,” the company said.
Last month the Mongolian government suspended SouthGobi’s mining licenses on what it called national-security concerns, following a bid by China’s state-owned Aluminum Corp. of China Ltd. ACH -4.66% The Chinese company had agreed to buy a controlling stake in SouthGobi in a deal valued at as much as 7.2 billion Hong Kong dollars (US$927 million)
Ivanhoe’s largest project is in Mongolia, where it owns 66% of the massive Oyu Tolgoi copper and gold mine.
Source: Wall Street Journal