China-based multinational aluminum company Aluminum Corporation of China (Chinalco) has signed a lock-up agreement with Canadian-headquartered international mining company Ivanhoe Mines, the majority shareholder in Mongolia-based coal producer South Gobi Resources Co.
Under the framework of the agreement, Chinalco will submit relevant documents to all shareholders of South Gobi Resources with the intention of purchasing 56-60 percent of common shares of South Gobi Resources for a consideration of $1 billion. At the same time, Ivanhoe Mines has agreed to sell its total shareholding in South Gobi Resources, i.e., its 57.6 percent stake. Thus, Chinalco would be certain to acquire a majority stake in the Mongolian mining company. In 2011, South Gobi Resources produced 4.57 million mt of raw coal.