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Prophecy Coal signs Mongolian thermal coal offtake deal

World Coal,

The Canadian coal producer Prophecy coal has signed an additional offtake agreement with an undisclosed buyer for thermal coal from its idled Ulaan Ovoo mine in Mongolia.

Under the terms of the contract, Prophecy Coal will supply 30,000 tpm of thermal coal to the buyer, which the company said was a “new customer with substantial presence in the region.”

Recommence mining operations

Mining operations at Ulaan Ovoo mine were suspended in July 2012. Prophecy Coal has commenced pit dewatering, recalling leased mining equipment, hiring, and diesel and parts procurement to recommence operation of the Mongolian mine, with November 2013 as the target date.

In August, Prophecy Coal announced it had agreed multiple sales contracts with a number of buyers for Ulaan Ovoo coal totalling 30,000 tpm.

Prophecy said that during September it loaded coal from existing stocks at the mine site and railed it to customers.

Customer demand

"Fulfilling the off-take agreements is contingent on the mine restart as the quantity and quality of the existing stockpile are insufficient to supply customer demand beyond October, 2013," the company commented.

The Ulaan Ovoo mine contains 174 million t of measured and 34 million t of indicated resources. The bituminous coal has low ash (11.3%) and low sulfur (0.4%) properties.


Adapted from press release by Katie Woodward

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