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Mongolia awards coal licence to Modun Resources

11th July 2013

By: Idéle Esterhuizen

  

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JOHANNESBURG (miningweekly.com) – The Mineral Resources Authority of Mongolia (MRAM) has approved Australia-listed coal explorer Modun Resources’ application for a mining licence for the Nuurst thermal coal project, 120 km south of Ulaanbaatar.

The mining licence had been granted over an area of 2 497 ha, covering the planned openpit mine, an area for surface infrastructure and the resource area, which remains open to the north of the planned mine.

“This is a significant achievement and critical milestone for Modun, as we move towards first production of coal,” MD Rick Dalton said in a statement.

He stated that the Nuurst project met all the key criteria - technical, economic and environmental sustainability - as set out by the MRAM.

“The approval of the mining licence provides us with greater certainty over the timeframe to progress with the development of a mine. This enables us to further advance discussions with potential customers and to aggressively pursue other commercial opportunities we have been exploring. This includes the negotiations for the off-take agreement as a preferred supplier of briquettes to the Mongolian government as part of their clean air initiative,” Dalton added.

Modun would start the feasibility work for the Nuurst project, which would expand on the initial mining study and would seek to confirm the overall infrastructure and mine costs and the final mine plan to maximise the economic benefits from the mine.

The feasibility work was also an important step in obtaining the financing required for the mine development.

The initial mining study identified the potential for an 84.7-million-ton sub-bituminous thermal coal mine with a 30-year mining life, with production ramping up to tree-million tons a year by the fourth year of operation.

Market opportunity contributed to Modun’s interest in Mongolia, as demand for energy there and in Northern China continued to grow rapidly. Chinese thermal coal imports for the first quarter of 2013 increased by 33% to 53-million tons, up from the first quarter of 2012.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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