Ovoot metallurgical coal project sparks interest from prospective investors

Aspire Mining Ltd. has announced it has received non-binding MOUs from four North Asian steel mills and metallurgical coal buyers for the purchase of metallurgical coal that will be produced from Aspire’s Ovoot metallurgical coal project.

The MOUs represent a possible commitment by Chinese customers to purchase up to 5.6 million tpa of metallurgical coal. They also represent the majority of all planned saleable production coal from the Ovoot project’s stage 1 development.

Potential customers from Japan, Russia and Eastern Europe have also indicated an interest in purchasing metallurgical coal from the Ovoot project.

Testing recently completed by Aspire has confirmed Ovoot metallurgical coal, when used as part of a coke oven feed blend, could replace the use of hard metallurgical coals and improve the caking ability of lower quality metallurgical coals and coke breeze, a recycled coke oven residue. Ovoot metallurgical coal has a high vitrinite content of 97%, along with high fluidity and good plastic properties.

Ovoot metallurgical coal falls within the clean fat coal (FM) specification, within the Chinese market, which is highly valued and in short supply in China. FM coals are used to reduce batch costs and reliance on seaborne traded hard metallurgical coals.

Substantial interest

Aspire managing director, David Paull, said of the MOUs that the company was “pleased with the initial interest received in [the project’s] metallurgical coal properties, given the relatively short time that preliminary marketing of the coal has been undertaken.”

“It is clear that interest in Nort Asia is substantial,” Paull continued. “[interest] is in excess of the potential volume of sales from the first stage of development at Ovoot, indicated by the non-binding MOUs.”

The Ovoot coal project

The Ovoot coal project comprises three contiguous exploration licences, which span across over 500 km^2.

To date, only 30% of the entire Ovoot Basin has been explored. Exploration drilling conducted within the Hurimt and Zuun Del tenements, approximately 25kms east of the existing Ovoot Coal Resource identified the existence of coal bearing sediments without intersecting significant coal seams or basement, which indicates the exploration potential.

A pre-feasibility study was completed in May 2012, which confirmed the technical and commercial viability of a large-scale open-pit mining operation at the project.

The project is expected to commence production in early 2016, initially producing up to 6 million tpa of saleable metallurgical coal, in the first stage of the project, and up to 12 million tpa at full production. This gives the project a total of 184 million t over a mine life of 20 years. Ovoot is the second largest coal reserve in Mongolia.

Aspire assume 50% of Ovoot coal will be sold at the Chinese border, and 50% through eastern Russian ports, by accessing the Russian rail system.

Aspire was granted a Mining Licence MV 017098 in August 2012.

Adapted from press release by Samuel Dodson

Read the article online at: https://www.worldcoal.com/coal/12072013/ovoot_coal_project-sparks_interest_from_prospective_investors_265/