Mongolia mine closure plunges SouthGobi into the red
(Reuters) - Mongolia-focused coal miner SouthGobi Resources Ltd posted a hefty loss for 2012 as Ulan Bator forced it to suspend its only producing mine in response to a takeover bid from China's state-owned Chalco .
But SouthGobi, which is now controlled by Rio Tinto Ltd , has resumed operation and aims to produce 3.2 million tonnes of semi-soft coking coalthis year, its president and chief executive, Ross Tromans, told Reuters in a telephone interview.
"We have looked at our mine, our cost structure, and our market, we believe it makes sense to come back," said Tromans, appointed in September to run the company after aluminium giant Chalco's failed bid for control of SouthGobi.
Chalco, which sought to diversify into coal, iron ore and electricity, dropped its $926 million bid in September, faced with stiff political opposition from Mongolia.
Tromans shrugged off the persisting weakness in the Chinese steelmarket to which the company supplies all its coking coal, whose prices have plunged in the past 12 months.
"Yes, prices have plunged, but from a very high level," he said. "You need to be a producer, to be back in there when the demand picks up. We can't wait to let it happen."
The company posted a net loss of $103 million last year, versus net profit of $58 million in 2011 as revenue dived to $53 million from $179 million.
Shares of SouthGobi in Hong Kong fell 3.3 percent on Tuesday. The stock has lost 67 percent in the past 12 months.
SouthGobi said last Thursday it had resumed operations at its flagship Ovoot Tolgoi mine in Mongolia after about nine months.
But SouthGobi, which is now controlled by Rio Tinto Ltd , has resumed operation and aims to produce 3.2 million tonnes of semi-soft coking coalthis year, its president and chief executive, Ross Tromans, told Reuters in a telephone interview.
"We have looked at our mine, our cost structure, and our market, we believe it makes sense to come back," said Tromans, appointed in September to run the company after aluminium giant Chalco's failed bid for control of SouthGobi.
Chalco, which sought to diversify into coal, iron ore and electricity, dropped its $926 million bid in September, faced with stiff political opposition from Mongolia.
Tromans shrugged off the persisting weakness in the Chinese steelmarket to which the company supplies all its coking coal, whose prices have plunged in the past 12 months.
"Yes, prices have plunged, but from a very high level," he said. "You need to be a producer, to be back in there when the demand picks up. We can't wait to let it happen."
The company posted a net loss of $103 million last year, versus net profit of $58 million in 2011 as revenue dived to $53 million from $179 million.
Shares of SouthGobi in Hong Kong fell 3.3 percent on Tuesday. The stock has lost 67 percent in the past 12 months.
SouthGobi said last Thursday it had resumed operations at its flagship Ovoot Tolgoi mine in Mongolia after about nine months.
Comments
Post a Comment