Money

CIC invests $500m in Mongolia miner

(Agencies)
Updated: 2009-10-27 15:55

China's main sovereign wealth fund is investing $500 million in a Canada-based company that mines coal in Mongolia, expanding its multibillion-dollar global shopping spree for resource assets.

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China Investment Corp（CIC）is investing in a 30-year secured debenture issued by SouthGobi Energy Resources Ltd, the company said in a statement Tuesday. It said the instrument is convertible to common equity.

CIC manages a portion of Beijing's foreign reserves and has made a string of purchases of oil, mining and other resource assets in hopes of profiting from future demand in China and elsewhere.

SouthGobi's majority owner is Canada's Ivanhoe Mines Ltd. Its flagship mine, Ovoot Tolgoi, is in southern Mongolia near the Chinese border and sells coal to customers in China.

CIC also has invested in oil production in Russia and Kazakhstan, mining in Canada and other assets. In September, it paid $850 million for a stake in Hong Kong's Noble Group Ltd, a major commodities-trading house.

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