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Prophecy Coal adds another offtake partner

08 Oct 2013


Canada-based Prophecy Coal on Monday said it had added a third offtake partner for its Mongolian Ulaan Ovoo mine, which it plans to restart during November.
 
The company said it had inked a 30 000 t/m accord with a new customer with “substantial presence” in the region.
 
The company’s asset would also supply more than 30 000 t/m of coal to cement plants, a metallurgical plant, a heat plant, chemical plants and Russian traders, all of which signed binding agreements over the past two months.
 
Prophecy said it had started pit dewatering, recalling leased mining equipment, hiring, and diesel/parts procurement to bring the mine, where operations had been curtailed since July 2012, back into production.
 
Ulaan Ovoo coal mining operations were temporarily suspended owing to the stockpile of coal at the time (187 000 t) being sufficient to meet contractual supply obligations through the balance of 2012.
 
The company recently executed a coal sales contract of significant quantity with a buyer in Russia, which is contingent on the ability to transport coal through the Zeltura border. Prophecy said a Mongolian government resolution had listed the border as being ‘under renovation, meaning it was neither open, nor closed.
 
Despite the company having offered to assist in renovating the associated Zeltura infrastructure, including the customs clearing facility at the mine, and road improvement from the mine to Zeltura, it could not give a definitive time frame to start transporting coal through the border post.
 
The road improvement, which required a feasibility study and environmental impact assessment studies, were expected to be complete by the end of the year. The road improvement project was expected to take two to four months.

Source: Mining weekly