SouthGobi Resources Ltd. (TSE:SGQ) (HKSE:1878) Monday said that its board has appointed Ross Tromans as president and CEO effective immediately, after the "industry veteran" was nominated for the position last week.
The coal producer on September 12 said president and chief executive, Alexander Molyneux, had been terminated.
The company said that deputy chairman Sean Hinton will manage the transition on behalf of the board over the next few weeks.
“I am honored and excited to be named to lead SouthGobi Resources,” said Tromans.
“We are confident in the long-term market and industry fundamentals for quality coking coal deposits in Mongolia such as our Ovoot Tolgoi operation.”
Tromans added that he looks forward to working with the board and the management team as SouthGobi focuses on strengthening its core business performance and realizing Ovoot Tolgoi's production potential.
“Ross [Tromans] brings a wealth of industry insight to SouthGobi after almost three decades in the coal and energy sector,” said new SouthGobi chairman, Kay Priestly in a statement last week. Priestly is also the CEO of Turquoise Hill Resources (TSE:TRQ).
SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi region.
The company's flagship coal mine, Ovoot Tolgoi, produces and sells coal to customers in China. SouthGobi said it plans to supply a wide range of coal products to markets in Asia.
Earlier this month, SouthGobi announced that Aluminum Corp of China (Chalco) and Turquoise Hill dropped a $925 million bid for the company, citing “minimal prospect” of obtaining the necessary regulatory approvals within an acceptable time frame.
Chalco’s plans to acquire a stake in SouthGobi were hindered by the Mongolian government, which passed a law in May restricting foreign state-owned companies from controlling key assets. The Chinese company was due to make a takeover bid by September 4 after it agreed with Turquoise Hill to extend the deadline for a second time.
Chalco proposed in April to buy as much as 60 per cent of SouthGobi for $8.48 per share.
Turquoise Hill, a unit of Rio Tinto (NYSE:RIO) which recently changed its name from Ivanhoe Mines, has a 58 per cent stake in SouthGobi.
Turquoise Hill is building the $6.2 billion Oyu Tolgoi copper and gold mine in Mongolia with Rio Tinto, scheduled to begin production in 2013.
SouthGobi also unveiled board changes in early September, including the resignation of three existing directors and the appointment of five new directors.
Last month, the company posted a sharply lower second quarter profit as sales volume and revenue declined due to the curtailment of mining operations at its Ovoot Tolgoi mine in Mongolia.
Sales volume in the latest period declined as the takeover bid by Chalco resulted in the Mineral Resources Authority of Mongolia announcing a request to suspend exploration and mining activity on certain licenses.
The company was also impacted by various infrastructure constraints in Mongolia, and the softening of inland China coking coal markets toward the end of the second quarter.
