Rio’s Turquoise Hill Unit to Sell 29.95% of Coal Miner SouthGobiMichael Kohn
Turquoise Hill Resources Ltd., the Mongolian coal miner controlled by Rio Tinto Group, agreed to sell 29.95 percent of SouthGobi Resources Ltd. for C$25.5 million ($23.5 million).
National United Resources Holdings Ltd. will pay 45.5 Canadian cents per share, a 31 percent discount to SouthGobi’s last traded price in Toronto yesterday, the Hong Kong-based buyer said in a statement today. Turquoise Hill will maintain a 26 percent stake in SouthGobi after the deal.
The transaction comes almost two years after Aluminum Corp. of China Ltd., China’s biggest aluminum producer known as Chalco, dropped a bid to buy 60 percent of SouthGobi for C$925 million. For National United Resources, whose businesses included coking coal trading, the deal will allow it to secure supplies of the steelmaking ingredient and to continue to diversify its natural resources business.
“SouthGobi will continue to focus on its business and drive to deliver upon its 2014’s objectives with the usual high priority on safety,” it said in a separate statement.
SouthGobi’s Hong Kong-traded shares fell 4.7 percent to HK$5.06 as of 2:10 p.m. local time. The stock closed at 66 cents yesterday in Toronto. National United Resources gained as much as 18 percent in Hong Kong, before trading unchanged at 2:13 p.m. local time.