Source: Mongolia Energy Corporation                             Date: 12 August, 2010

Mongolia Energy Corporation (MEC) has told Prime Minister S.Batbold that with the feasibility study completed and its reserve estimated, the Khushuut coal mine will be operational by next October. Not just mining, but its wash plant and enrichment factory will also start working. “Some civil movements and local people were against the coal mine operation, but all differences have now been resolved in a spirit of harmony,” the Governor of Khovd province has said, expressing relief and happiness that the work at the mine would help change the face of Khovd.

Over 800 workers are employed at the mine, and over 310 km of road and bridges are planned to be built. According to the Government resolution, the concession agreement will be used to solve the coal export issue. The mine has 85 million tons of coal and roughly half of this is coking coal. This reserve estimate applies only to its studied area. There might be other huge reserve in other areas.

In June 2010, MEC awarded a six-year, USD232-million contract to Leighton Asia to develop and operate the mine. Leighton will carry out all mining activities including planning, drilling, transport and handling of coal. Annual production will be 0.5 mt in the first year, rising to 8 mt by fourth year. The estimated mine life is 19 years. The mine is spread over 600 hectares and the total cost of developing it is expected to reach USD202 million in the first two years.

Exploration work was carried out by the China National Administration of Coal Geology. The company is planning to conduct further exploration to measure additional coal reserves. The open-pit method will be used to extract coal. Diesel-powered hydraulic excavators will be used. Track dozers will be used for material movement and overburden dump maintenance. Front-end loaders will also be used for pit clean-up and coal loading.

MEC is planning to construct a 1,100t/h coal preparation plant to process raw coal. The USD60-million plant will produce coking coal, middling and rejects. It will be operational by the third year of operation. Until the plant is constructed, the coal will be processed using a dry screening process.