Prophecy Coal Corp. (TSE:PCY)(OTCQX:PRPCF) said Monday that it has received the license certificate from Mongolian regulatory authorities to construct the 600 Megawatt (MW) Chandgana thermal power plant.
Coal for the power plant will be supplied from the company's Chandgana Tal Deposit, for which Prophecy already obtained a full mining license. Tal contains 141 million tonnes of measured coal and is located just nine kilometres north of Prophecy’s Chandgana Khavtgai project, a deposit with over 1 billion tonnes of measured and indicated coal.
The license for the power plant, which was received by Prophecy's Mongolian subsidiary, East Energy Development, is the first such license of its kind issued by the Mongolian government in terms of size.
To ensure strict compliance with Mongolian laws and regulations, the company has retained a number of Mongolian and international consultants over the past 18 months, with considerable efforts also spent on community relations, Prophecy said.
Chandgana is 60 kilometres from Underkhann city, and 150 kilometres from Baganuur city. Construction of transmission lines linking the two cities through Chandgana is considered a top priority for an improved national Mongolian energy system, Prophecy said.
Chairman and CEO of Prophecy, John Lee, commented: “Prophecy has distinguished itself as the premier candidate to build the next Mongolian thermal power plant. There is an understanding among all stakeholders that Mongolia, being one of world’s fastest growing economies, needs additional power.
"With the IMF projecting a deficit of over 600MW by 2016, this need has become critically urgent and can no longer be delayed.”
The license issuance paves the way to conclude various contracts and project financing arrangements, as well as joint venture discussions in 2012. The company plans to start construction of the plan in the first quarter of 2013.
"Prophecy has navigated the permitting process with rigor and results. With the above timeline, and considering Mongolian climate, we will work diligently to fire up the first unit by January 2016. We look forward to working closely with all relevant agencies, authorities, and communities to commission the Chandgana plant,” Lee concluded.
Prophecy Coal is a Canadian-listed company engaged in developing energy projects in Mongolia. The company has over 1.4 billion tonnes of surface minable thermal coal resources on two coal properties in Mongolia. Its Ulaan Ovoo coal mine is in production.