The story
Early history
The company was founded in 2002. SouthGobi listed on the Toronto Stock Exchange in 2007 and Hong Kong Stock Exchange in 2010.
In 2009, the China Investment Corporation funded a $500 million convertible debenture issued by SouthGobi. In March 2010, $250 million of the convertible debenture was converted into SouthGobi common shares. This move lowered the interest held by Ivanhoe Mines (later renamed Turquoise Hill Resources) to 57.6%.
Blocked Chalco sale
By 2012, Ivanhoe Mines had come under the influence of its largest shareholder Rio Tinto, which wanted to sell non-core assets, which included SouthGobi. In the same year, Ivanhoe Mines attempted to sell its 57.6% of SouthGobi to Aluminum Corporation of China Limited (Chalco) for $889 million. The attempt announced in April 2012 failed. Chalco called off the deal in September 2012 after estimating "chances for obtaining approval from the Mongolian government were slim".
Negative public opinion in Mongolia based on resource nationalism opposed the sale. The masses did not want majority ownership by Chinese state-owned enterprises of companies in their mining industry. Harassment by the Mongolian government targeting SouthGobi and its personnel also took its toll. During and after the sale process, the Mongolian government jailed SouthGobi employees and suspended its mining license for several months. In October 2012, its chief legal counsel Sarah Armstrong was detained and prevented from leaving the country. The Mongolian government alleged the company management had bribed Mongolian state officials. The allegations resulted in the shutdown and search of SouthGobi headquarters in Mongolia by a Mongolian anti-corruption agency. In May 2013 Justin Capla, another company executive, was prosecuted and later sentenced to prison for five years. He was later pardoned by President Tsakhiagiin Elbegdorj in February 2015.
Fallout from Chalco sale failure
The aggressive actions of the Mongolian government against SouthGobi succeeded in blocking the deal with Chalco but had the effect of terrifying foreign investors, resulting in a large slump in investment to Mongolia that continued for several years after 2012.
SouthGobi would dramatically lose value after the blocked sale. The company had been valued at $3 billion Canadian dollars at its high point in 2012.
In March 2015, Novel Sunrise Investments, a private Chinese firm from the Novel Group of companies, became SouthGobi's largest shareholder. Furthermore, Novel Sunrise also appointed three members to SouthGobi's board. Novel Sunrise also separately bought shares in a different company called Turquoise Hill Resources, which also owned shares in SouthGobi.
In January 2020, SouthGobi LLC, a subsidiary of SouthGobi Resources, donated ₮80,000,000 to Manidbadar General Education School, a school in Noyon District, Ömnögovi Province.
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In June 2021, SouthGobi's CEO was awarded the Mongolian Medal of Friendship, and the company's VP of Public Relations was also awarded the title of Honored Lawyer of Mongolia.
From Wikipedia’s article on SouthGobi Resources, shared under CC BY-SA 4.0.3