Vancouver-based SouthGobi Resources Ltd. (TSX:SGQ) has fired president and CEO Alexander Molyneux in what’s being seen as a move by Rio Tinto Ltd. to fix the company’s soured relationship with the Mongolian government and get the idled Ovoot Tolgoi coal mine re-started.
Rio Tinto Ltd. recently bought a majority stake in Ivanhoe Mines, which has since changed its name to Turquoise Hill Resources (TSX:TRQ). Among other benefits, the purchase gave Rio Tinto a majority stake in SouthGobi.
Last week, SouthGobi announced the resignation of three directors and the appointment of five new directors, including Turquoise Hill CEO Kay Priestly as the new board chair.
Yesterday, the company announced that Ross Tromans will replace Molyneux as president and CEO. According to the company, Tromans has 30 years of sales and marketing experience in the coal and energy sectors covering the Asian North American markets and was most recently general manager marketing at Rio Tinto Coal Australia.
In a company statement, Priestly welcomed Tromans’ “wealth of industry insight” and said the company will focus on strengthening its core business performance.
“We are committed to operating SouthGobi and realizing Ovoot Tolgoi’s production potential,” Priestly said, referring to SouthGobi’s flagship mine. Ovoot Tolgoi which has been idled since Mongolia suspended its licences in April to protest a since-scuttled deal that would have seen Aluminum Corp. of China Ltd. take over SouthGobi.
SouthGobi’s stock, which has lost more than two-thirds of its value since its licence suspension at Ovoot Tolgoi, has barely moved with the announcement of the leadership change.
