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October 24, 2009

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Home » Business » Energy

SouthGobi gets loan from CIC

MINING group SouthGobi Energy Resources has secured a US$300-million loan from China's sovereign wealth fund, sources said yesterday, as China pushes ahead with investing in Canada's natural resources sector.

While SouthGobi, 80 percent owned by Ivanhoe Mines, is listed in Canada, the company is focused on exploring and developing metallurgical and thermal coal deposits in Mongolia and Indonesia.

The loan from China Investment Corp will allow the company to fund infrastructure, more mines and coal processing projects, sources said.

The deal between CIC and SouthGobi could be announced as early as next week, according to the people who were familiar with the plans.

Reuters reported in June that SouthGobi plans to raise roughly US$250 million through a Hong Kong initial public offering. The company hopes to complete the IPO by the first quarter of next year, one source said yesterday.

Macquarie Group is advising SouthGobi on the CIC loan, according to the source, adding that CIC would gain some equity in the company as part of the deal. Spokespeople for all three firms were not available for comment.


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