Mongolia Energy Corporation is forging ahead with plans to commence mining its premium coking coal at its Khushuut Mine in Khovd Province, western Mongolia in 2009, despite the global financial crisis hurting the global mining industry.
MEC is strongly committed to meeting the coking coal demands of the PRC's Xinjiang Uyghur Autonomous Region’s steel manufacturers and plans to commence with production of 3 million tonnes per annum expanding to 8 million tonnes per annum in or around 2012. The strategically located Khushuut Mine is a quarter of the distance by road to Xinjiang's steel producers compared with Shanxi Province where current limited supplies of premium coking coal are predominantly based.
Mr James Schaeffer CEO of MEC said that "Exploration of 600 out of its 330,000 hectares of coal, ferrous and non ferrous metal concession areas in western Mongolia has demonstrated 150 million tonnes of surface mineable JORC compliant in place coking coal resources. Coking coal of the grade in Khushuut, western Mongolia, is a commodity with established demand. The initial coking coal market is Xinjiang, in the People's Republic of China, where it does not have a significant local supply of coking coal. Xinjiang’s coal deposits are predominantly thermal and of lower quality than available coals from Khushuut."
The Xinjiang steel demand for coking coal was identified by Shanxi Fenwei Energy Consulting when it carried out an independent market study for MEC’s Khushuut coal.
The wider significance of MEC’s project is that it will be complementary to the PRC's Go West Policy to develop Xinjiang. As the PRC’s CNY 4 trillion economic stimulus package is rolled out, a major portion of it will be used for infrastructure development requiring steel production and hence boost coking coal demand an essential ingredient to steel production.
After obtaining its coal, ferrous and non ferrous metal concession areas in western Mongolia, the exploration process entailed MEC bringing together Chinese exploration companies, local Mongolian labour and the John T Boyd Company, a leading international mining audit and consultancy firm to provide support and supervision for the project. This international collaboration focused, professional and realistic working of the project has earned MEC a pre-eminent position in western Mongolia, second to none.
In addition to commencement and mine development at Khushuut, MEC will explore for further coal resources in the vicinity of Khushuut, located in Darvi Soum, Khovd Province, western Mongolia and other prospective areas, and continue exploring for gold, copper and other mineral deposits.
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