Ovoot coal gets the nod
THE BOURSE WHISPERER: Mongolia-focused coal play Aspire Mining has received the thumbs up for the coal at its wholly-owned Ovoot coking coal project, located in northern Mongolia Ovoot project.
In a recently prepared marketing report international coal market consultants Wood Mackenzie confirmed coking coal from Aspire’s Ovoot project had highly attractive properties that would meet global seaborne market requirements.
In its report Wood Mackenzie said Ovoot coal could be described as ‘A strongly caking, hard coking coal with superior blend carrying capacity,’ and that hard coking coal would be an appropriate price benchmark.
The Ovoot project has a 330.7 million tonne JORC Compliant Resource with high washing yields of 80% and an 8% ash content, based on recent wash analysis.
Aspire said Wood Mackenzie stated that, based on available quality data, Ovoot coking coal was in an ideal range for mid volatile hard coking coal and fat coal classifications.
The consultancy also confirmed Ovoot coking coal presented as a value add blend coal – able to be blended with cheaper inert coals due its very high vitrinite content and good fluidity.
“The Wood Mackenzie Report confirms our view that Ovoot is a quality coking coal by any measure,” Aspire Mining managing director David Paull said in the company’s announcement to the Australian Securities Exchange.
“Confirmation that hard coking coal prices are an appropriate benchmark for Ovoot coking coal provides us with confidence to progress a prefeasibility study into the larger scale development of the project.
“Potential markets for our coal include all of the large high growth markets of China, India and Brazil as well as the established markets of Japan, South Korea, Taiwan, Russia and Europe.”
Aspire is considering development of the Ovoot project in two stages.
Stage 1 is a small scale development based on a 0.5 to 1 million tonne per annum starter open pit, providing direct ship ore.
This ore will be trucked 550 kilometres to the nearest rail siding at Erdenet, while work continues on developing a rail connection from the Mine to Erdenet.
From Stage 1 Aspire is predicting high yields of 80% and a 15 million tonne per annum indicative open pit run of mine.
With this in mind it is confident of achieving Stage 2 production of as much as 12 million tonnes per annum of coking coal with a rail connection to Erdenet and the Trans Mongolian Railway.
In its report Wood Mackenzie forecast a strong market for good quality coking coals over the medium to long term driven by large demand increases from rapidly expanding markets such as India and Brazil.
It says coking coal prices have rallied beyond historic levels and high premiums above thermal coal are forecast to continue.