SouthGobi Resources Aims to Secure Second Mongolian Coal Mining License
SouthGobi Resources Ltd., backed by China’s sovereign wealth fund, aims to get a mining license for a second coal pit in Mongolia by the year-end.
The company will apply for a permit for the Soumber deposit in the coming months, Chief Executive Officer Alexander Molyneux said at a media briefing in Hong Kong today. About $205 million is needed to develop the mine, he said.
The Toronto and Hong Kong-listed coal producer already operates a pit at Ovoot Tolgoi, also in the deserts of southern Mongolia. The nation, bordering China and Russia, has some of the world’s largest untapped mineral resources.
SouthGobi hopes to start production at Soumber by 2012, Molyneux said. The pit’s reserves of coking coal are “radically higher” than previously thought, he said, without giving a new estimate. Additional survey work had been carried out at the site this summer, Molyneux said.
The deposit was previously estimated to hold about 77 million metric tons of coal. Ovoot Tolgoi has about 283 million tons, Molyneux told reporters.
The coal producer has $744 million in cash to fund expansion plans and doesn’t need extra financing to develop Soumber, he said.
The coal producer posted a second-quarter operating loss yesterday, partly because of upgrading work at Ovoot Tolgoi. Net income was $53.3 million compared with a loss in the second quarter last year, following a $72 million gain from derivatives agreements.
China Investment Corp. owns about 13 percent of SouthGobi’s shares. The company plans to produce about 14 million tons of unprocessed coal in 2013, compared with 1.3 million tons last year, Molyneux said in an interview on April 14.
To contact the reporter on this story: John Duce in Hong Kong at Jduce1@bloomberg.net
The company will apply for a permit for the Soumber deposit in the coming months, Chief Executive Officer Alexander Molyneux said at a media briefing in Hong Kong today. About $205 million is needed to develop the mine, he said.
The Toronto and Hong Kong-listed coal producer already operates a pit at Ovoot Tolgoi, also in the deserts of southern Mongolia. The nation, bordering China and Russia, has some of the world’s largest untapped mineral resources.
SouthGobi hopes to start production at Soumber by 2012, Molyneux said. The pit’s reserves of coking coal are “radically higher” than previously thought, he said, without giving a new estimate. Additional survey work had been carried out at the site this summer, Molyneux said.
The deposit was previously estimated to hold about 77 million metric tons of coal. Ovoot Tolgoi has about 283 million tons, Molyneux told reporters.
The coal producer has $744 million in cash to fund expansion plans and doesn’t need extra financing to develop Soumber, he said.
The coal producer posted a second-quarter operating loss yesterday, partly because of upgrading work at Ovoot Tolgoi. Net income was $53.3 million compared with a loss in the second quarter last year, following a $72 million gain from derivatives agreements.
China Investment Corp. owns about 13 percent of SouthGobi’s shares. The company plans to produce about 14 million tons of unprocessed coal in 2013, compared with 1.3 million tons last year, Molyneux said in an interview on April 14.
To contact the reporter on this story: John Duce in Hong Kong at Jduce1@bloomberg.net
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