Turquoise Hill deal to exit Mongolia miner SouthGobi falls through

Fri May 1, 2015 11:56am EDT
 
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By Susan Taylor

TORONTO May 1 (Reuters) - A deal that would have allowed Canada's Turquoise Hill Resources Ltd to unload its remaining stake in Mongolian coal miner SouthGobi Resources, a company that was once worth billions of dollars, has fallen through.

Turquoise Hill said on Friday that the agreement with National United Resources Holdings expired on April 30.

The deal's failure marks another setback in Turquoise Hill's effort to sever ties with SouthGobi, a company hit by a slowing Chinese economy, weaker coal prices, accounting problems and funding woes.

Turquoise Hill, a unit of global miner Rio Tinto, said it could not complete the transaction with Hong Kong-listed National United Resources for 56.1 million SouthGobi shares, a 23.3 percent stake, under the terms of the agreement.

The C$12.8 million ($10.5 million) deal was announced in July 2014.

Vancouver-based Turquoise Hill also owns an about 66 percent stake in the massive Oyu Tolgoi copper-gold mine in Mongolia.

"Our focus is Oyu Tolgoi and we are looking at alternatives for divesting our remaining stake in SouthGobi," Turquoise Hill spokesman Tony Shaffer said in an email.

Last week, Turquoise Hill closed a deal with private Chinese company Novel Sunrise Investments Ltd to sell 48.7 million shares in SouthGobi for about C$17 million.   Continued...