Mongolian metallurgical coal developer Auminco Mines has entered into a memorandum of understanding (MoU) with Darkhan Thermal Power Plant (DTPP) for the supply of coal from its Berkh Uul Bituminous Coal Project (BU Project) in northern Mongolia.
Auminco is currently the subject of a takeover offer by Viking Ashanti which has to date received acceptances from about 92.69% of Auminco’s shareholder base. The offer is due to close on 23 May 2014.
Viking Ashanti managing director Peter McMickan said the fact that Berkh Uul Project has been recognised by the Mongolian Government as being a potential key supplier of coal to the DTPP is a significant milestone in the development of the project.
"Auminco’s discussions with nearby cement works and power stations had already confirmed a local industrial demand for unwashed Berkh Uul coal, due to its low ash, low sulphur and relatively high calorific value. This MOU provides further evidence of the potential customer base for Berkh Uul’s coal," McMickan added.
DTPP is a major electricity supplier to Mongolia’s second largest city, Darkhan, and the northern region of Mongolia. It comprises a 47MW power plant that consumes approximately 400,000 tons of coal a year.
An upgrade for an additional 35MW capacity is currently underway and due for completion in 2015.