The Mongolian producer, a subsidiary of mining giant Ivanhoe Mines, released a statement to the market on Monday informing shareholders of MRAM’s request, which sent its shares tumbling overnight, dropping 12% to $C6.36.

The company said it was not pre-warned and had received no formal notification over the intention to suspend activities on its licenses.

“The company … has no reason to believe SouthGobi’s licenses are not in good standing,” SouthGobi said.

“The company cautions at this time that any official notification received may require a suspension of operation until an injunction is granted.”

It said the MRAM stated that the move was in connection to the proposed takeover bid by Aluminum Corporation of China (Chalco) to buy a controlling stake in SouthGobi from Ivanhoe Mines.

SouthGobi has notified its other major stakeholders on the matter, including Rio Tinto and the China Investment Corporation.

Earlier this month, Chalco made an offer to acquire a 60% stake in SouthGobi Resources for $889 million.

SouthGobi said it was informed by its 57.6%-shareholder Ivanhoe Mines that Ivanhoe had agreed to accept the offer under a signed lock-up agreement with Chalco.

SouthGobi’s Ovoot Tolgoi mine, which began production in 2009, sells coal to customers in China.

The company is one of the largest coal producers in Mongolia and also has three development projects in the Soumber and Zag Suuj deposits.