Page 10 - AsiaElec Week 33 2022

AsiaElec COAL AsiaElec

SouthGobi reports 2Q results,

says coal exports to China

picking up after restart

MONGOLIA TORONTO and Hong Kong-listed coal miner to cross the Chinese-Mongolian border, as well
SouthGobi Resources, which operates the Ovoot as the volume of coal exports have increased,
Tolgoi coal mine in Mongolia, said on August 12 said SouthGobi, adding: “As a result, the Com-
that it recorded a $2.7mn profit from operations pany has gradually resumed mining operations
in the second quarter of this year compared to a beginning on July 15, 2022. The Company’s
$1.0mn loss from operations in the second quar- major mining operations, including coal min-
ter of 2021. ing, have resumed and the Company expects to
“The financial results for the second quarter increase the volume of coal production in a grad-
of 2022 were impacted by the foreign exchange ual manner, while coal processing shall remain
gain of $1.4 million, a write off of other payables suspended for the time being. The Company will
of $1.6 million and by the decreased sales result- revisit the possibility of resuming coal process-
ing from the temporary closure of the Ceke Port ing at a later date.”
of Entry experienced by the Company during South Gobi also said that it experienced an
the second quarter,” SouthGobi said. increase in the average selling price of coal from
In a note on operating results, it advised: “In $47.9 per tonne in the second quarter of 2021 to
response to the increase in the number of the $66.6 per tonne in the second quarter of 2022,
Coronavirus Disease 2019 (COVID-19) cases due to improved market conditions in China.
in Ejinaqi, a region in China’s Inner Mongolia In a note on its China Investment Corpo-
Autonomous Region where the custom and bor- ration (CIC) convertible debenture, South-
der crossing are located, reported in late October Gobi said: “On May 13, 2022, the Company
2021, the local government authorities imposed and CIC entered into an agreement (the “2022
stringent preventive measures throughout the May Deferral Agreement”), pursuant to which
region, including the temporary closure of the CIC agreed to grant the Company a deferral of
Ceke Port of Entry located at the border of Mon- (i) semi-annual cash interest payments of $7.9
golia and China. million payable to CIC on May 19, 2022 (the
“Accordingly, the Company’s coal exports “Deferred Amounts”); and (ii) the management
into China were suspended from November fee which payable to CIC on February 14, 2022
2021 to May 2022. On May 25, 2022, the Ceke and August 14, 2021 (the “Deferred Manage-
Port of Entry re-opened for coal export on a trial ment Fee”) under the Amended and Restated
basis. As a result, the Company recorded 0.1 Cooperation Agreement (collectively, the “2022
million tonnes of sales in the second quarter of Deferral Amounts”) under the Convertible
2022.” Debenture.”™
Since May 25, the number of trucks permitted

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