The company’s Ovoot Early Development Project PFS confirms that significant coking coal production can be achieved from Ovoot at a low capital cost to unlock attractive economics.
Aspire Mining Ltd (ASX:AKM) remains committed to turning the Ovoot Coking Project in Mongolia into a first world development that will provide high-quality jobs and community benefits to ensure efficiency and mitigate environmental impacts.
While momentum with the project and the Ovoot Early Development Project, in particular, has been impacted by the COVID-19 pandemic and the Mongolian Government’s successful response, Aspire has not been resting on its laurels.
In its latest annual report, chairman David Paull said the pandemic had impacted on the company’s ability to host community consultation meetings which were necessary to complete the permits and approvals processes.
He said: “While we have been on standby, the company has been engaging directly with local community leadership, negotiating a joint community development plan and identifying opportunities to partner with local businesses to ensure that the benefits of resource development at Ovoot are spread far and wide.”
The plan is set to identify opportunities in partnering with local businesses to ensure that the benefits of resource development at Ovoot are spread far and wide.
Aspire is focusing on efficient coal beneficiation technology that will be powered by renewables.
Trucking of washed coal product to the Mongolian rail network will focus on high-efficiency trucking technology which limits emissions and other wastes along sealed roads to avoid the dust issues on unsealed roads seen in the south of the country.
Coking coal market outlook
The coking coal market itself has been negatively impacted by industrial shutdowns in the global steel industry.
China’s steel industry recovered ahead of most driven by Government stimulus, while other large consumers such as Japan and India are rebuilding.
As governments continue to provide economic support to the post COVID recovery, coking coal demand is predicted to improve along with prices in 2021.
In December 2019 the company completed a A$33.5 million placement to major shareholder Mr Tserenpuntsag, following shareholder approval.
Paull said this placement was more than just about raising funds to provide a strengthened and substantive balance sheet.
He said: “It was also part of a strategy for the company to present as a more Mongolian aligned company and to ameliorate the local negative reactions to foreign investment.”
At June 30, 2020, Aspire Mining had cash of $40.7 million and no debt.
The organisation was restructured to reduce overhead expenditure while waiting for the necessary permits and approvals needed to advance the Ovoot Coking Coal Project.
Ovoot Early Development Plan
Aspire is targeting early production of washed coking coal from a first-stage development of the Ovoot Project, known as the Ovoot Early Development Project (OEPD).
The OPED is focused on a truck and rail operation to annually deliver 4 million tonnes of ‘fat’ coking coal from a starter pit that sits within a larger 255 million tonnes Ovoot JORC Reserve to end markets within 12 to 15 months of final operational and board approvals.
Operational expansion can occur following the construction of the Erdenet-to-Ovoot Railway, which is being progressed by Aspire’s subsidiary, Northern Railways LLC.
Fat coking coal is valuable in the Chinese and Russian steel industries due to its excellent blend carrying characteristics and the ability to improve coke quality when blending with lower quality coking coals.
The OEDP will transform Aspire into a significant pure-play coking coal producer positioned in the second quartile of the global cost curve.
A 560-kilometre road alignment from Mogoin Gol to the railhead at Erdenet has been approved.
Nuurstei Coking Coal Project
Aspire also has a 90% interest in Nuurstei Coking Coal Project in northern Mongolia.
The company completed the acquisition of the corporate entities that held the remaining 45% interest in the project in July 2017 for US$1 million, increasing its total interest in Nuurstei to 90%.
In October 2017, a mining licence was issued over the deposit.
Existing near-surface indicated resources of 4.8 million tonnes and inferred resources of 8 million tonnes could potentially enable a modest mining operation washing the relatively high ash raw coal down to a 10% ash product.
Further drilling and other engineering work is required in order to complete early-stage feasibility work at Nuurstei.
However, this work has been deferred while negotiations with the local community continued but this plan was replaced in 2019 by the change in strategy to development of the more advanced and far larger scale Ovoot Early Development Project.