Creamer Media’s Mining Weekly: SouthGobi curtails Mongolia coal output, suspends capex

TSX-listed SouthGobi Resources has suspended uncommitted capital and exploration expenditure and reduced its mining activity at its flagship Ovoot Tolgoi coal mine, in Mongolia, to preserve the group’s financial resources. SouthGobi implemented these initiatives during the second quarter of the year to maintain efficient levels of working capital and to prevent the build-up of a significant unsold coal inventory, as deteriorating market conditions continued to impact on the exploration and development company. The company, which is also listed in Hong Kong, said late on Monday it expected second-quarter production to reach between 200 000 t and 300 000 t. At the end of the quarter, production at Ovoot Tolgoi would be “entirely curtailed”. Considering the difficult conditions of the second quarter and uncertainty surrounding third-quarter development, SouthGobi warned that sales volumes, pricing and production volume outcomes for the full year of 2012 could not be estimated. To read the full article, click hereSouthGobi curtails Mongolia coal output, suspends capex

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