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Aspire Mining Proves Ovoot Coking Coal Could Upgrade Tavan Tolgoi Coal

Jul. 29, 2013 1:50 AM ET
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Aspire Mining (ASX: AKM) has demonstrated the quality of the coking coal from its Ovoot Project after testwork confirmed its superior blend carrying capacity.

Importantly, blends of Ovoot coking coal with non-coking coal from the Government owned Tavan Tolgoi mine in southern Mongolia displayed good coking properties.

"The very positive blending results of Ovoot and TT coals demonstrates the carrying capacity of Ovoot's fat coal," managing director David Paull said.

"This also has the important benefit for Mongolia in being able to establish a new large and long term revenue stream for this blended coal adding substantial value to the 100% Mongolian Government owned Tavan Tolgoi mine."

Tavan Tolgoi is located in the South Gobi region of Mongolia and is one of the world's largest deposits of coking coal.

Ovoot testwork

The testwork was carried out by Mongolian Independent Research Group that consists of professors from the National University of Mongolia and senior researchers from Mongolia's Mining Research Laboratory.

This found that coals from seams 0, 3 and 4 from the Tavan Tolgoi deposit that were blended with indicative coking coal from Ovoot resulted in a good quality coking coal with a Chinese classification of "Primary Coking Coal" or "1/3 Coking".

Seam 0 is generally classified as thermal coal and samples from seams 3 and 4 were confirmed as oxidised coal with nil remaining coking properties.

Samples from these seams were washed to bring ash levels down to a targeted 10% and then combine with Ovoot coal on a 50/50 basis.

Of particular importance is seam 0 which is classified as thermal or weakly coking coal by both Tavan Tolgoi and the adjacent UHG Mine owned by Mongolian Mining Corporation.

Thermal coal makes up about 30% of Tavan Tolgoi coal reserves and the washed sample from seam 0 when analysed exhibited minimal coking properties as expected.

Over the next 20 years significant quantities of thermal coal and oxidised coking coal will be mined from the Tavan Tolgoi. These are obvious blending partners for Ovoot Project coal due to their similar rank and vitrinite categories.

Tavan Tolgoi coals are low in sulphur whereas Ovoot Project coking coal is high in caking and plastic properties necessary to produce coke.

Blending Logistics

On 20 June 2013 it was reported that a consortium involving the UK's Ashmore Fund and Russia's
Euroasia Investment Fund along with Mongolian Railways had signed off on an investment package to fund the Tavan Tolgoi to Sainshand Railway.

Sainshand Industrial Park is currently a project of national Mongolian importance that includes two planned coke plants with coal blending facilities, making it the ideal site for blending the coals.

Ovoot Project coking coal could be transported to Sainshand via the proposed Ovoot to Erdenet Railway and the existing Trans-Mongolian rail line.

Blended coal could be sold south and east to China or north into Russia along the planned Tavan Tolgoi sales routes.


Aspire has a 100% interest in the Ovoot Coking Coal Project in northern Mongolia and is targeting production of up to 12 million tonnes per annum over 20 years with first production in 2016.

The company received a Mining License in August 2012, and is considering a smaller scale starter pit road based operation whilst continuing to progress access to rail infrastructure and other regulatory approvals to support a larger operation.

Notably, the company has also received non-binding Memoranda of Understanding from four North Asian steel mills and coking coal buyers for the purchase of up to 5.6 million tonnes of coking coal to be produced from the Ovoot Coking Coal Project.

This represents nearly all of the planned total saleable production from the Ovoot Project's Stage 1 development.

Ovoot is the second largest coking coal Reserve in Mongolia at 219 million tonnes.


With testwork indicating that Ovoot coal could be blended with non-coking coals from Tavan Tolgoi to produce a good quality coking coal, Aspire Mining has opened up another potential use for production from the project.

This blending option, the MoUs it has already received and ongoing marketing efforts that has seen just half of the Chinese target market approached to date, all indicate that Aspire will have little difficulty finding buyers for its coal.

Notably, considerable upside exists to further increase the size of the Ovoot Resource as just 30% of the Ovoot Basin, which the project covers the majority of, has been explored to date.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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