While SouthGobi’s majority stakeholder Turquoise Hill Resources is in favor of Chalco’s bid, it is unlikely to move further, with Mangolia trying to restrict increasing presence of China in the region’s mining industry, reported Reuters.
SouthGobi chief executive Alex Molyneux told the news agency that the company believes that Chalco’s deal may not get through.
"The evidence I have before me seems highly unlikely that the bid is going to go forward. It’s 100 percent clear that Mongolia has made the deal impossible," Molyneux said.
SouthGobi has interests in significant thermal coal projects in Mongolia, on the border to China, for which Chalco made a bid for 60% interest worth C$8.48 a share in February 2012.
