Chalco said on Thursday it has decided to extend its offer for a majority stake in Mongolia-focused coal miner SouthGobi Resources Ltd for the second time, the Chinese aluminium giant said on Thursday, in the face of stiff political opposition in Mongolia.
Chalco will extend the time for it to make a proportional takeover bid for up to 60 percent of the common shares of SouthGobi by 30 days, Chalco said in a filing with the Hong Kong stock exchange.
Toronto and Hong Kong-listed SouthGobi's shares have wilted since April, when Aluminum Corporation of China Ltd -- better known as Chalco -- announced a $926 million, or C$8.48 share bid for a controlling interest in the company, which owns large coal projects in Mongolia close to the Chinese border.
SouthGobi shares last traded at C$4 apiece in Toronto.
The proposed deal has the backing of SouthGobi's majority shareholder, Ivanhoe Mines Ltd, but it faced political opposition within Mongolia almost immediately, which is getting wary about the growing Chinese presence in its mining sector.
Authorities in the resource-rich country threatened to revoke SouthGobi's mining licenses and the government outlined plans to enact new investment rules that would allow it to review deals involving foreign companies with assets in the country.
On July 3, Chalco announced it would delay its plan to acquire the majority stake in SouthGobi by 30 days as it was still seeking to secure regulatory approvals in Mongolia.
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