Source: Business Review Australia                   Date: 10 November, 2010

Mongolia Energy Corporation Limited (MEC) is an energy and resources developer that has global brand recognition aspirations. With current operations and investments over Mongolia and Xinjiang in North-western China, Mongolia Energy looks to acquire, explore and develop additional energy and mineral resources with related projects. The first project on MEC’s path to become a global energy leader is its current and primary project, the Khushuut coking coal mine, a 600-hectare site on MEC’s 330,000 hectares of concession areas in Western Mongolia.

“A deal was cut; the assets were worthwhile and the acquisition was completed,” says Mr. James J. Schaeffer, CEO. “I was brought on to take this company from the various businesses that it had in the past—and make the transition to an energy company.” After the initial 34,000 hectares acquisition, MEC completed a second transaction for an additional 32,000 hectares and a third transaction for 263,000 hectares, all totaling 330,000 hectares in Western Mongolia of various coal and mineral licenses. Finally, MEC completed a fourth transaction, acquiring 3,000 hectares of an iron ore deposit.

“Those properties are all run by our Mongolia subsidiary, known as MoEnCo LLC,” says Mr. Schaeffer. “The headquarters for those operations are in Ulaanbaatar. In addition to that, we took a 20 per cent interest in a Mongolian oil and gas company, MoOiCo. We are a passive investor in that, which is moving along slowly. Our main emphasis is on the Khushuut mine and other licenses.”

Mining the resources is not enough in Mongolia, a region where a strong infrastructure network is absent. As such MEC must invest in periphery projects as well. The company has constructed a 340-km, two-lane paved highway to transport the coal to the Chinese border. Upon completion, the road will be a USD200-million asset on MEC books. Other planned infrastructure projects include a wash plant, which is being designed by Taggart Global LLC. MEC is working on the preliminary design of an initial 12-mw power generation facility assisted by Shenyang Design Institute. These projects will benefit the community as will additional schoolhouses, scholarships and 400 local jobs.

“We will basically be managing a series of contract operators. Even if the projects go to joint venture partnerships, it is our objective to retain control,” says Mr. Schaeffer. “The ability to organize a project and move on to the next one is our competitive strength.”