Chalco gives up effort to buy SouthGobi

Aluminum Corp of China Ltd, the nation's largest producer of the metal, said it dropped its C$925 million ($938 million) bid for coal producer SouthGobi Resources Ltd as it's unlikely to win regulatory approval.

"The proposed transaction has minimal prospect of obtaining the necessary regulatory approvals within an acceptable time frame," Vancouver-based Turquoise Hill Resources Ltd, SouthGobi's largest shareholder, said on Monday in a statement. "As a result, Turquoise Hill and Chalco have agreed to terminate the lockup agreement, including Chalco's obligation to make a proportional offer."

Chalco's plans to acquire a stake in SouthGobi have been 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 Tuesday after it agreed with Turquoise Hill to extend the deadline for a second time.