VANCOUVER - Aluminum Corporation of China Ltd. and Ivanhoe Mines Ltd. (TSX:IVN) said Wednesday they would work with the Mongolian government regarding any proposed legislation to review a deal between the two companies.
Ivanhoe Mines has signed an agreement to sell its stake in SouthGobi Resources (TSX:SGQ) and its coal operations in Mongolia to the Chinese aluminum company.
The companies said the Mongolian government is considering new foreign investment legislation.
Chinese ownership of Mongolian assets has been a point of contention for Mongolia.
Chalco has said it will not to take up any shares under its bid until regulatory approvals from the Mongolia government and others have been obtained.
"In the event new foreign investment legislation is implemented by the government of Mongolia prior to the completion of the partial offer of the shares in SouthGobi, Ivanhoe and Chalco will co-operate with the government to ensure any requirements under such legislation are satisfied," the companies said.
Earlier this week, the Mongolian government asked that work be stopped at SouthGobi's Ovoot Tolgoi mine.
The company said at the time that the Mineral Resources Authority of Mongolia requested the suspension in connection with a plan by Ivanhoe Mines to sell its controlling interest in the company to Chalco.
A suspension would be initiated to allow Mongolia to review the proposed change of ownership, the company said.
Ivanhoe struck a deal earlier this year to sell its 57.6 per cent stake in SouthGobi to the Chinese company for about $889 million.
Chalco is offering C$8.48 per SouthGobi share and Ivanhoe currently owns 104.8 million shares of SouthGobi.
The move will provide Ivanhoe with much-needed cash to help fund construction of its Tolgoi copper, gold and silver mine in southern Mongolia.
