CIC buysstake in Canadian mine firm
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China Investment Corp has agreed to invest US$500 million in a Mongolian-focused Canadian-listed coal company.
CIC said it will make the investment in the form of a secured, convertible debenture issued by SouthGobi Energy Resources Ltd.
The instrument is convertible to common equity of SouthGobi, a coal mining and exploration company with its main production assets in Mongolia.
CIC, China's sovereign wealth fund, has made a string of purchases in the resources and commodities sector in countries from Kazakhstan to Indonesia.
CIC Chairman Lou Jiwei said in a People's Daily interview last week that the fund has quickened its investment pace this year as the drop in asset, stock and commodity prices due to the financial crisis has created investment opportunities.
SouthGobi, a unit of Ivanhoe Mines Ltd, said it will use the Chinese loan to accelerate the development of its Mongolian coal projects.
Among them, its flagship Ovoot Tolgoi mine will be expanded to 8 million tons per year, from the current sales target of 1.4 million tons for 2009.
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