* Chalco reiterates interest in buying majority stake
* Chalco says to delay tender offer by about 30 days
* SouthGobi shares rise 9 pct in morning trading (Adds details, background, updates share price)
TORONTO, July 3 (Reuters) - Shares of SouthGobi Resources Ltd rose more than 9 percent on Tuesday after Chinese aluminum producer Chalco reiterated its interest in acquiring a majority stake in the Mongolia-focused coal miner despite political obstacles.
Toronto-listed SouthGobi’s shares have wilted since April, when the Aluminum Corporation of China Ltd - better known as Chalco - announced a $926 million bid for a controlling interest in the company, which owns large coal projects in Mongolia close to the Chinese border.
The proposed deal has the backing of SouthGobi’s majority shareholder, Ivanhoe Mines Ltd, but it faced political opposition within Mongolia almost immediately.
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.
Although Mongolia has opened its doors to foreign investors over the past decade, Chinese companies have found it hard to gain access to Mongolia’s vast copper and coal reserves. Some analysts argue that this is due to a tumultuous history that has bred mistrust between the two countries.
Ivanhoe and Chalco have agreed to cooperate with Mongolia to ensure that all rules under the country’s new strategic foreign investment legislation are satisfied. Despite these assurances, investor skepticism about the deal had led to a more than 40 percent slide in SouthGobi’s shares over the past three months.
Last week, SouthGobi warned that the uncertainty over its licenses in Mongolia was making it difficult to estimate sales volumes for the year.
Although Chalco and Ivanhoe announced on Tuesday that the proportional tender offer to all SouthGobi’s shareholders would now be delayed by a month, investors took comfort in knowing that Chalco remains committed to the deal.
Shares of SouthGobi, which closed last week at C$3.85, rose more than 9 percent to C$4.20 on Tuesday morning.
Chalco will now make its C$8.48 a share proportional offer for up to 60 percent of SouthGobi’s common shares to all shareholders, on or before Aug. 3, the companies said.
Chalco was originally expected to mail its takeover bid circular on or around July 5. The companies gave no reasons for the delay.
Ivanhoe has entered into a lock-up agreement with Chalco and has agreed to tender all of its SouthGobi shares on a pro-rata basis.
Vancouver, British Columbia-based Ivanhoe, which is now majority-owned by global miner Rio Tinto, plans to use proceeds from the deal with Chalco to fund development of the massive Oyu Tolgoi copper-gold project in Mongolia.
$1=$1.01 Canadian Reporting By Euan Rocha; Editing by Peter Galloway