BRITISH COLUMBIA

SouthGobi dumps CEO, names Rio Tinto Coal Australia executive to fill the job

09/12/2012 04:41 EDT | Updated 11/12/2012 05:12 EST
VANCOUVER - SouthGobi Resources Ltd. (TSX:SGQ) said Wednesday that it has dumped president and chief executive Alexander Molyneux and named Ross Tromans, former general manager marketing at Rio Tinto Coal Australia, to replace him.

The move comes a week after Aluminum Corporation of China Ltd. (Chalco) withdrew its controversial offer for up to a 60 per cent stake in the coal miner.

The company said the board still needs to confirm the appointment of Tromans, but deputy chairman Sean Hinton would manage the transition and lead the company in the interim.

Following regulatory concerns, Chalco and Turquoise Hill Resources (TSX:TRQ) cancelled a deal last week that would have seen the company formerly known as Ivanhoe Mines sell its stake in SouthGobi to the Chinese company.

Chalco's offer to buy a controlling stake in SouthGobi had raised concerns in Mongolia about Chinese ownership of the company.

Earlier this year, Mongolia's parliament passed a foreign investment law that appeared aimed at stopping Chalco.

The new chief executive appointment follows the resignation of three existing directors and the appointment of five new directors to bring it to nine members last week.

Turquoise Hill chief executive Kay Priestly joined the board as chairwoman, while Hinton, founder and principal of consulting firm Terbish Partners, was added as deputy chairman.

Turquoise Hill is developing the Oyu Tolgoi mine in southern Mongolia.

Rio Tinto owns a 51 per cent stake in Turquoise Hill, which in turn owns two-thirds of the Oyu Tolgoi project. The Mongolian government owns the remaining third.

SouthGobi's flagship coal mine, Ovoot Tolgoi, produces and sells coal to customers in China.