A subsidiary of one of Mongolia’s largest coal producers has been ordered by a Hong Kong arbitral tribunal to repay USD 11.5 million to a commodities firm following a dispute stemming from a coal supply agreement, according to a Thursday notice.
SouthGobi Resources Ltd., which is listed on both the Toronto and Hong Kong stock exchanges, said that the tribunal ordered SouthGobi Sands LLC to make the payment to First Concept Industrial Group Ltd.
SouthGobi Resources Ltd., has been ordered to repay the sum of USD 11.5 million (which SGS had received as a prepayment for the purchase of coal) to First Concept, together with accrued interest at a simple interest rate of 6% per annum from the date which the prepayment was made until the date of the Arbitration Award, and then at a simple interest rate of 8% per annum until full payment. The Arbitration Award is final, except as to costs which have been reserved for a future award.
SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia’s South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coalmine. Ovoot Tolgoi produces and sells coal to customers in China.
