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Berkh Uul coal mine to supply coal to Khutul Cement and Lime

World Coal,

Viking Mines has announced that an initial non-binding memorandum of understanding (MOU) has been signed between Auminco Mines and Khutul Cement and Lime (KCLC), relating to future potential coal supply.

Viking chairman, Jack Gardner, said, “The MoU, signed with Khutul Cement and Lime, was a significant event for the company, as KCLC is Mongolia’s largest cement manufacturer. We understand KCLC has plans to substantially increase cement production to meet a growing domestic demand. This would result in its coal demand increasing from the current 250,000 tpa to around 400,000 tpa or 500,000 tpa.”

“Viking is optimistic about winning a big slice of KCLC’s business as low sulfur content is a feature of Berkh Uul coal, which is important for cement manufactures”, Gardner added.

Auminco is currently the subject of a takeover offer by Viking. To date, over 97% of Auminco’s shareholder base has accepted the offer.

This is the fourth memorandum of understanding secured for the Berkh Uul bituminous coal project. Previous MoUs relate to the supply of coal to the Darkhan metallurgical plant, Darkhan power plant and the Erdenet coal-fired power plant.

Gardner said: “Securing these four MOUs since April 2014 confirms Auminco’s ability to liaise with government and local industry for the future potential coal supply from Berkh Uul. It also demonstrates the existence of strong local Mongolian industry demand for Auminco’s potential supply of coal.”

Located 400 km north of Ulaanbaatar, the Berkh Uul coal mine is estimated to have a JORC resource of 38.3 million t of high quality bituminous coal and exploitation is expected to start next year.

KCLC, a semi-privatised Mongolian State owned industrial company, is located approximately 60 km west of Darkhan City in the northern region of Mongolia.

Written by Sam Dodson

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