SouthGobi an opportunity or exit?

SouthGobi has been hit by 2 news.


Firstly, its auditors Deloitte & Touche LLP has resigned as auditors on its "own initiative". The statement itself does raise a huge question mark on if anything fishy is going on in SouthGobi.


Secondly, the more worrying part, the Mongolian government is seeking a temporary halt of exploration and mining licenses for the company’s flagship Ovoot Tolgoi coal mine, SouthGobi said, following Aluminum Corp. of China’s bid for control of SouthGobi. 


In my view, China has a great need for coal. Mongolia has coal. Despite China having loads of coal, the bottleneck of their railway infrastructure will not be solved instantaneously, other factors as well of course but I'll spare the details. China will exert its political will on Mongolia. Mongolia still depends on China and if I am not wrong, according to the statistics in 2011, Mongolia has overtaken Australia as the number 1 Coal exporter to China.


Mongolia still has to build on their infrastructure to access, if I am not wrong, Vladivostok for port access to export their coal. So for now, they have to rely on China. Although it seems like Russia is increasingly interested in mining assets in Mongolia. 


From an article I read online,


"A ton of coking coal from Australia costs about USD 185, while a ton from Mongolia costs USD 62. China imports coking coal from Mongolia through the Sehee border point."


China will continue to secure coal from Mongolia.


I believe this is a buy opportunity.