Friday October 23, 09:30 AM
UPDATE 1-China's CIC to lend Canada's SouthGobi $300 mln-sources
By Joseph Chaney and Michael Flaherty
BEIJING/HONG KONG, Oct 23 (Reuters) - Mining group SouthGobi Energy Resources has secured a $300 million loan from China's sovereign wealth fund, sources said on Friday, as China pushes ahead with investing in Canada's natural resources sector.
While SouthGobi, 80 percent owned by Ivanhoe Mines (IVN.TO - news) , 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 China Investment Corp. (CIC (CC.NX - news) ) 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 $250 million through a Hong Kong initial public offering . The company hopes to complete the IPO (IPOA.NX - news) by the first quarter of next year, one source said on Friday.
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 agreement. Spokespeople for all three companies were not immediately available for comment.
The sources had direct knowledge of the deal but were not authorised to speak publicly about it.
(Reporting by Joseph Chaney and Michael Flaherty; Editing by Chris Lewis and Ken Wills) Keywords: SOUTHGOBI CIC/
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