Aspire moves Mongolian promise towards reality

The Ovoot site. Image: Aspire Mining.

High-quality hard coking coal has become one of the mining industry’s most sought after products.

The world’s top reserves of hard coking coal are limited, however, with the likes of Australia, Canada and Mongolia the jurisdictions most capable of offering output of the highest standards.

A long way from its headquarters in Perth, Aspire Mining owns the world-class Ovoot coking coal project in Mongolia.

The project is a major prospect for the future mining of a relatively low ash, low strip ratio and high yielding ‘fat’ coking coal.

Mongolia may indeed be a significant distance from Aspire’s home base, but on the flipside the Asian country neighbours the world’s leading consumer of hard coking coal to the south – China.

Encouragingly for Aspire, a Fenwei Energy Information Services report earlier this year identified an annual fat coking coal supply gap of 16 to 22 million tonnes in China over the period to 2025.

While the Fenwei report focused on the Chinese marketplace, the location of Ovoot also means there are viable markets for the proposed mine’s product in Eastern Europe and Russia.

Market factors such as these have created an urgency for Aspire to move Ovoot into production as quickly as possible, something it hopes to do in mid-2021.

Aspire chairman David Paull says time has become “very important” for the company as it advances the Ovoot project.

“We have looked at how we can bring production forward,” Paull tells Australian Mining. “There aren’t many projects out there and there is no money going into exploration. So we only really have projects that were found in the last boom and there are only a small number of those.”

Aspire delivered a pre-feasibility study (PFS) for the Ovoot early development project (OEDP) this year and expects to release a definitive feasibility study (DFS) in the September quarter.

The OEDP would focus on a starter pit that sits within the site’s 255 million tonne JORC ore reserve, according to the PFS.

Aspire would deliver the washed coal via a 560 kilometre special purpose haul road that would be constructed to connect to a rail head at Erdenet, north-east of Mongolian capital, Ulaanbaatar.

The coal would then be delivered on the Mongolian rail network, which has confirmed capacity for the OEDP product, to the border with China for end customers.

Aspire’s base case Ovoot starter pit would be a 36.8 million tonne JORC ore reserve carve out from the overall project reserves.

The pit would support an initial 9.2-year mine life at Ovoot, at four million tonnes a year, while a proposed rail connection between the site and Erdenet is developed in parallel.

Aspire’s inclusion of the road in the PFS emerged as a key move that would rapidly push the project into production. However, Paull says the addition of the road is a case of ‘back to the future’ for the company.

“When we first looked at starting Ovoot back in 2011-12 we did look at a road connecting the site up to the local provincial capital,” Paull says.

“So there is a well-honed path for how this would go. We have been finding that the local communities are very supportive, in particular, as the road is something they will also access and can use.

“I think that is a good way to start to get that support and this is a country that is heavily underinvested in terms of infrastructure so it all helps.”

Aspire would transform into a significant coking coal producer with the base development, but the company also has an extended case to expand the site into a longer life operation.

The company would undertake an additional cutback of the OEDP pit that increases the mine life to 12.5 years at an annual rate of four million tonnes under the plan.

Aspire has also flagged the potential to extend the mine life even further through future cutbacks with additional mine planning.

“How we extend Ovoot will depend on the infrastructure that we build, so if we have the road and rail connection develop over the next few years a very large scale expansion is possible,” Paull says.

“The value proposition is maximised with railway. The volumes could lift from four million tonnes to a 10 million tonne level with the rail.

“What the OEDB does is pays for all on site capital, pre stripping and the road such that we don’t have to go back again and do any further material investment over a long period.”

Mongolia may be a considerable way from Aspire’s roots in Western Australia, but as promise in Ovoot grows, another producer of high- quality coking coal moves closer to being established every day.

This article also appears in the May edition of Australian Mining.

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