The Ovoot coking coal project in Mongolia comprises one mining license and two contiguous exploration licenses
Australia-based metallurgical coal and infrastructure company, Aspire Mining has signed a Memorandum of Understanding (MoU) with Sinosteel Equipment & Engineering (Sinosteel MECC) to develop the Ovoot coking coal project in Mongolia.
Located in the Khuvsgul province in north-western Mongolia, the Ovoot coal project comprises one mining license and two contiguous exploration licenses covering 130km².
As per the terms of the non-binding MoU, Aspire Mining and Sinosteel MECC will discuss engineering, procurement, and construction (EPC), and funding options required for the Ovoot early development project (OEDP) wash plant.
Aspire Mining will enter into discussions with Sinosteel regarding the OEDP pre-feasibility study (PFS) including the construction of 5 million tonnes per annum (Mtpa) Coal Handling and Preparation Plant (CHPP), which is estimated to cost $37m.
Additionally, the firms will discuss trade-based financings including future metallurgical coal sale pre-payments and/or a streaming funding facility for the project.
Aspire to access Sinosteel MECC’s Coal Trading Platform
The MoU also allows Aspire to access Sinosteel MECC’s Coal Trading Platform, which is designed to enable the sale of coal on a spot basis in China.
Aspire Mining executive chairman David Paull said: “Aspire recognises the importance of having a strong partnership with companies like Sinosteel MECC that play such a major role in the Chinese steel industry, the main market for Ovoot’s high-quality coking coal product.
“We look forward to working alongside Sinosteel MECC as one of our key partners in bringing the Ovoot Early Development Project into production and delivering value for all Shareholders.”
Over an estimated operational life of over 21 years, the Ovoot coking coal project is expected to produce up to 10Mtpa of coking coal.
Aspire is planning to finalise the definitive feasibility study for the project in May 2020.
Subject to securing financing and all permits by the first quarter of 2020, Aspire plans to start pre-stripping of waste at the Ovoot mine in the third quarter of 2020.
In 2014, the Mongolian government had approved an extension of a rail line from Erdenet to Aspire Mining’s Ovoot.