The Aluminum Corporation of China Limited (CHALCO), China's biggest aluminium producer made a deal to pay 926 million USD for controlling stakes in the SouthGobi Resources held by the Ivanhoe Mines, according to the report by Bloomberg. Under the deal, CHALCO plans to buy up to a 60 percent stake in SouthGobi Recourses for 8.48 CAD per share in cash.

As of today Ivanhoe Mines owns 57.6 percent or 104.8 million shares of the SouthGobi Resources. Previously Robert Friedland, the Founder of the company has been informing that they might sell some of its ownership in order to finance its Oyu Tolgoi project. CHALCO offered to Ivanhoe Mines to pay 889 million CAD in total, 8.48 CAD per share which is 28 times higher than the current market price. 

Ivanhoe Mines signed a lock up agreement with CHALCO. In other words CHALCO will have the obligation to purchase the SouthGobi Recourses’ coal at market prices for a period of 2 years. Also, CHALCO will assist SouthGobi Recourses to procure electricity for its operations either through a direct connection to grid power, or through development of a conveniently located power plant. CHALCO will also provide support to SouthGobi Recourses coal-haul highway project. 

Aluminum Corporation of China Limited (CHALCO) was established as a joint stock limited company in the People’s Republic of China on September 10, 2001 by way of promotion by Aluminum Corporation of China (CHINALCO), Guangxi Investment (Group) Co., Ltd. and Guizhou Provincial Materials Development and Investment Corporation.