Oct. 27, 2009 (China Knowledge) - China Investment Corp, the country's US$300 billion sovereign wealth fund, has agreed to invest in SouthGobi Energy Resources.

CIC said in a statement released late Monday that it will buy a 30-year secured debenture issued by the Canadian company for US$500 million. The debt will be able to convert into SouthGobi's common shares in 12 months.

Citigroup Global Markets Asia Ltd was the financial adviser on the deal.

Listed on the TSX Venture Exchange, South Gobi is 80% owned by Ivanhoe Mines. The company is mainly engaged in the exploration and development of metallurgical and thermal coal deposits in Mongolia.

The debt financing will be used to fund SouthGobi's coal projects in Mongolia. It also has plans to invest in regional transportation infrastructure around its Mongolian mines and a coal washing facility, said the Canadian company.

In September, CIC bought an 11% stake in Kazakh oil and gas company JSC KazMunaiGas Exploration Production for US$939 million.