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Aspire Mining provides Ovoot Coking Coal Project update

Published by , Editor
World Coal,

Aspire Mining Ltd is focused on the development of metallurgical coal assets in Mongolia, principally the wholly owned Ovoot Coking Coal Project (OCCP). There have been some recent positive developments in Mongolia which will assist the company in the funding and operation of the OCCP.


  • Resolution of the Oyu Tolgoi dispute.
  • Confirmation of a number of rail developments, including the commencement of construction of the Sainshand to Khangi\Mandal border railway, which will significantly alleviate bottlenecks at the Erlian border.
  • The growing requirement to use containers for bulk coal shipments into China.

Resolution of Oyu Tolgoi investment agreement and underground development approval

On 25 January 2022, the Board of Oyu Tolgoi unanimously approved commencement of underground operations at the Oyu Tolgoi copper\gold project (OT), by far the largest mining project in Mongolia. OT is owned 34% by the Mongolian government and 66% by Rio Tinto controlled Turquoise Hill Resources Ltd (TRQ). This approval followed the Parliament of Mongolia’s Resolution 103 which resolved a number of disputes between the parties and approved a comprehensive package of outcomes to progress development of OT.

Being by far the largest foreign investment in Mongolia, the OT disputes between the Mongolian government and Rio\TRQ gained worldwide negative attention. The continued uncertainty about the future operations of OT has been referred to by many commentators as an ongoing sovereign risk issue and expressed caution about the security of international investment into the country.

The OT Project is described by TRQ CEO, Steve Thibeault, as a “once in a generation mine that when finished is expected to be one of the largest copper producing mines in the world and a generator of vast economic value and employment in Mongolia.”

While the circumstances of Aspire and its OCCP are vastly different, nevertheless Aspire sees this as a watershed moment in revitalising the attractiveness of Mongolia as a standout destination for foreign investment combined with its excellent geological prospectivity and its strategic location in Asia.

This was confirmed by Luvsannamsrain Oyun-Erdene, the Prime Minister of Mongolia, who noted that: “The commencement of Oyu Tolgoi underground mining operations demonstrates to the world that Mongolia can work together with investors in a sustainable manner and become a trusted partner. As part of our ‘New Recovery Policy,’ I am happy to express Mongolia’s readiness to work actively and mutually beneficially with global investors and partners.”

Major Mongolian rail developments

There are significant tangible developments in rail that will significantly enhance the capacity of Mongolia to export to China, including:

  1. The commissioning of the 416 km long Zuunbayan – Tavan Tolgoi Railway is expected in March 2022.
  2. The progress on the 281 km railway from Zuunbayan to Khangi\Mandal. This project is expected to be completed in 2023 and will remove a significant bottleneck that currently exists in the railway from Sainshand to Zamyn -Uud\Erlian.
  3. Chinese rail authorities noting that they intend to extend the Erlian border checkpoint after the 2022 Lunar New Year celebrations, boosting Mongolian export capacity through Zamyn-Uud.
  4. The expectation that the Tavan Tolgoi – Gashuua Sukhait railway will be completed in July 2022, with the construction of the much shorter Gashuua Sukhait to Grants Mod railway that will deliver Mongolian coal directly into China, railway to start May 2022.

The Mongolia\China border at Khangi\Mandal is already receiving Mongolian iron ore exports by truck. The Mongolian government has prioritised both the 281 km rail extension to Khangi and the Khangi\Mandal border for a significant upgrade to its terminal activities as well as introducing container handling capabilities.

Aspire’s OCCP is planning to use both the expanded Zamyn-Uud\Erlian and Khangi\Mandal borders to export metallurgical coal, as well as markets accessible through the Russian rail system to the north.

Introducing containers to move metallurgical coal into China

Chinese border officials have recently been encouraging Mongolian iron ore and coal exporters to use containers through the Zamyn -Uud\Erlian border, which the company expects will also be extended to the Khangi\Mandal border once the railway connection has been completed.

While containers are more expensive on a per tonne basis than bulk carriers, there are specific benefits at the Mongolian\China border due to the change in rail gauge requiring transhipment. There are also environmental and commercial benefits in reducing coal dust and coal losses during transport, as well as providing additional product quality control over the entire logistics chain through to the end customer.

This mode of transport will be of particular benefit to Mongolian washed metallurgical coal exporters such as Aspire and its OCCP.

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