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Operations under way at Turquoise Hill’s Oyu Tolgoi project in the South Gobi desert in Mongolia.© Staff Photographer / Reuters/Reuters

SouthGobi Resources Ltd. dismissed chief executive officer Alexander Molyneux just more than a week after Aluminium Corp. of China Ltd. (Chalco) dropped a $926-million (U.S.) bid for the company that strained its relationship with the Mongolian government.

The coal miner named Ross Tromans, who was general manager marketing at Rio Tinto Coal Australia, as its new CEO.

Mr. Tromans' appointment strengthens the company's links with global miner Rio Tinto Ltd.

SouthGobi's majority shareholder, Turquoise Hill Resources Ltd., formerly Ivanhoe Mines Ltd., is majority-owned by Rio Tinto and five directors with links to Rio joined the board in a shakeup a day after the Chalco deal collapsed.

SouthGobi, which is listed in Toronto and Hong Kong, did not give any reason for the termination of Mr. Molyneux, who had been at the helm since October, 2009. The company could not be immediately reached for comment.

"We are committed to operating SouthGobi and realizing Ovoot Tolgoi's production potential," said chairman Kay Priestly, referring to SouthGobi's flagship coal mine in Mongolia.

Mongolia, close to China and home to some of the world's biggest unexploited mineral deposits, is one of the hottest destinations for mining investment.

But the government is wary of the growing Chinese presence in the sector and suspended SouthGobi's mining licences following the bid by state-controlled Chalco.

SouthGobi said last month that operations at the Ovoot Tolgoi mine had been halted since June 30 and were not expected to resume in the third quarter.

Chalco dropped its bid for a majority stake in SouthGobi after meeting stiff political opposition in Mongolia, citing difficulty in gaining regulatory approvals.

"With the Chalco transaction, you had a deterioration of the relationship between the company and the Mongolian government," said Meredith Bandy, an analyst at BMO Capital Markets.

"Not that any one person is responsible for that, but if you shake up the management team, it may help," she said, referring to Mr. Molyneux's termination.

"You are seeing them switch out a lot of ... the management team with what used to be Ivanhoe people and now they are being replaced with Rio Tinto [people]," Ms. Bandy added.

"Rio Tinto is probably trying to clean up and sell the company. They are not the long-term holder."

SouthGobi said deputy chairman Sean Hinton would lead the company until Mr. Tromans's appointment is confirmed by the board.

SouthGobi's shares, which have fallen 19 per cent since Chalco dropped the bid last week, rose more than 7 per cent to $2.34 (Canadian) on the Toronto Stock Exchange on Wednesday.