China invests $500 million in Canadian mining firm

Chinese state-owned China Investment Corporation (CIC) has announced that it will invest $500 million in the Canadian company SouthGobi Energy Resources, a unit of Vancouver-based Ivanhoe Mines.  The money will be used to accelerate the development of SouthGobiÔÇÖs Mongolian coal assets. The company's main project is currently the Ovoot Tolgoi coal mine in South Gobi region of Mongolia, approximately 40 kilometres north of the Mongolia-China border. The mine sells coal to China. The deposit will produce around 1.5 million tonnes of coal this year, but the company wants to increase production to eight million tonnes over the next five years. It also has plans to develop its Soumber deposit, which is located about 20 kilometres east of Ovoot Tolgoi. Work at the deposit is currently subject to the completion of feasibility studies and the securing of the appropriate licenses and permits. The company also wishes to invest in improvements to infrastructure at and around the Ovoot Tolgoi Mine, including the regional road network and a possible cross-border rail link between the mine and the Mongolia-China border crossing at Shivee Khuren-Ceke.  A new coal washing facility is also being planned. SouthGobi has estimated that the planned investments will result in the creation of around 300 new jobs in the region. ÔÇ£Our continued exploration successes have significantly expanded our coal resources in MongoliaÔÇÖs South GobiÔÇöand now we are in a position to develop our company into a prominent regional producer and exporter,ÔÇØ said Alexander Molyneux, SouthGobiÔÇÖs president and CEO. ÔÇ£Through this expanded investment program, we can accelerate the transformation of Mongolian coal resources into jobs, enhanced prosperity and sustainable development for Mongolia,ÔÇØ he continued.  ÔÇ£This is not just about expanding our mining capacity. This investment program will see us take the first step toward establishing value-added processing in Mongolia, which now is a priority for the Mongolian Government.ÔÇØ The investment marks the latest in a string from CIC, a $300 billion sovereign wealth fund, which is increasingly keen to secure stakes in natural resources ventures and commodities. SouthGobi was created in 2007 when Ivanhoe sold its coal assets to subsidiary Asia Gold Corporation, renaming it SouthGobi Energy Resources. It remains 80 percent owned by Ivanhoe, with the rest owned by institutional investors and mutual funds. In addition to the exploration and development of metallurgical and thermal coal deposits in Mongolia, SouthGobi mines coal in East Kalimantan, Indonesia.  *┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á *