SouthGobi Former CEO: Departure From SouthGobi 'Part of Process'

   By Chuin-Wei Yap 
 

BEIJING--Former SouthGobi Resources Ltd. (1878.HK) Chief Executive Alexander Molyneux said Thursday his departure overnight from the helm of the Mongolia-focused coal miner was the final part of an expected succession plan that gained momentum once the company's proposed sale to Aluminum Corp. of China Ltd. (ACH) fell apart last week.

SouthGobi said in a statement Wednesday that it had terminated Molyneux, who was also the company's president, effective Wednesday. It didn't provide a reason. Molyneux's departure comes slightly more than a week after the collapse of a potential $920 million deal to sell SouthGobi to Aluminum Corp. of China, the Chinese mining major also known as Chalco.

Chalco had bid in April to purchase a majority stake in Hong Kong-traded SouthGobi from Canada's Ivanhoe Mines Ltd., since renamed Turquoise Hill Resources Ltd. (TRQ.T). The end of the bid accelerated a plan to fully replace SouthGobi's board with directors backed by Rio Tinto PLC (RIO), which took a 51% majority of Ivanhoe in January.

"I was just the last guy to go," Molyneux told Dow Jones Newswires.

Chalco had expressed a preference to keep SouthGobi's management in place until after the proposed sale was finalized, Molyneux said. Chalco and Rio Tinto weren't immediately available for comment Thursday.

Molyneux said the investment climate in Mongolia's mining sector had become "very complex" after Ulan Bator introduced a law earlier this year to restrict foreign ownership of key resources.

Write to Chuin-Wei Yap at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires