TORONTO (miningweekly.com) – Mongolia-focused thermal coal producer and power plant project developer Prophecy Coal on Tuesday reported that authorities had approved the company’s ‘general development plan’ (GDP) for the Zeltura border crossing to Russia.

Mongolian authorities approved a plan that would allow Prophecy to reach Russian customers by a much more direct route, at cheaper costs, which bodes well for the company increasing margins at the flagship Ulaan Ovoo mine.

The TSX- and Frankfurt-listed miner said that the Ports General Authority had been instructed to take immediate measures to implement the GDP.

With GDP approval in hand, Prophecy expected the Mongolian Ministry of Road and Transportation to approve the company’s road feasibility study that it had previously submitted to build a 17 km road to connect the Ulaan Ovoo mine to the Zeltura border.

Prophecy was also working with the Mongolian Customs General Administration to establish a customs inspection and clearance area at the Ulaan Ovoo mine.

“The company’s goal is to see the Zeltura border opened, and to transport its first shipment of coal through it, this year,” Prophecy said in a statement.

Meanwhile, the company reported that it had so far this year sold and delivered coal shipments from the Sukhbaatar rail siding to a number of Russian customers.

Realised sale prices for coal with gross calorific value (GCV) of 4 500 kcal/kg to 5 000 kcal/kg with low ash (less than 10%) and low sulphur (less than 1%) ranged from 1 800 roubles a tonne to 2 400 roubles a tonne ($50/t to $65/t). Sale prices were also dependent on the point of delivery in Russia.

The company boasted that in just a few months, Prophecy and Ulaan Ovoo coal had earned a good reputation in the Russian Buryat region for supplier reliability and coal product quality.

Prophecy said that the Russian market remained a prime focus for Ulaan Ovoo’s management, who remained confident about the prospect of increasing the quantity of Russian sales and number of Russian customers over time. The opening of the Zeltura border was expected to significantly reduce transportation costs and thus, increase the company’s sales margins and competitiveness in the country.