Erdene has a 25% interest in the coal project with joint-venture partner Xstrata Coal Canada. Xstrata Coal announced in early February its intention to develop the Donkin coal project based on sales to the coking coal market. The deposit is located proximal to deep water with ready access to some of the shipping routes.
The resource includes 227 million metric tonnes (mt) of indicated and 254mt of inferred volatile-A bituminous (12,000-14,000 btu), sulphur, and medium ash coal. The processed Donkin coal also has many coking coal properties including low ash, medium sulphur, low phosphorus, high crucible swell number and fluidity.
Peter Akerley, president and CEO of Erdene, said: “We are extremely pleased with the way the Donkin coal project has advanced over the past two months. During that time, in addition to the mine road construction, significant efforts have been dedicated to engineering the coal preparation plant, barge loading facility and working with the regulators to finalize the path to development. The strategic location, high quality resource and the strengthening of the seaborne export and coking coal markets bodes well for the future of the project.”
Xstrata Coal has initiated studies by Sedgeman and GW Engineering/Kellogg Brown & Root to add a wash plant to the coal handling facility and to prepare prefeasibility level studies on the offshore transportation system. Mining consulting firm, Marston (Missouri), has been engaged to complete a pre-feasibility study of the revised project scope.
The Donkin coal project has previously received all necessary approvals to commence production of up to 350,000 tonnes of run-of-mine coal, with delivery in the initial years of the project via road transportation. The revised development plan includes an assessment of a Donkin headland sited offshore barge-to-ship coal transportation system and the construction of a wash plant, which will require additional federal and provincial approvals.
Xstrata Coal has contracted Stantec, a North America-based global environmental and engineering firm, for environmental permitting and regulatory compliance process.
The Donkin coal project was acquired by the joint venture partners in 2006. Since that time, work has been carried out to de-water and refurbish the previously established 3.5km twin access tunnels. In addition, National Instrument 43-101 compliant resource estimates and preliminary assessment studies were completed and an environmental assessment study was filed with the Nova Scotia Environment Department.
