MONGOLIA Energy Corporation has selected Leighton LLC (of Mongolia) as its international mining contractor for the development of its Khushuut coal mine project in western Mongolia.
MEC has, at Khushuut, 149 million tonnes of JORC coal resources, substantially coking coal. This is within 600 hectares of 330,000 hectares of MEC’s concession areas in western Mongolia. MEC has built a 310 km road foundation which is substantially complete and can transport coking coal from the Khushuut Mine to Xinjiang, China.
MEC’s independent technical review calls for a phased development of the Khushuut mine. The selection of Leighton LLC, initially for a 3 million tonnes per annum mining operations, and in case of expansion, for up to an 8 million tonnes per annum mining operations over time provides the support for MEC’s actual commencement into mining operations.
"I am excited that Leighton Asia now has two significant mines in operation in Mongolia. Our partnership with MEC on the Khushuut coal mine is the second mine we have commenced this year and will involve a similar level of work to our existing contract at the Ukhaakhudag coal mine in the South Gobi region of Mongolia," Leighton Asia Managing Director Hamish Tyrwhitt said.
"The extensive potential for mine expansion along with the quality of the coking coal means the mine will become a significant exporter of coal from Mongolia. Once we move from mine planning and pit development to full scale mining, the full potential of the Khushuut mine will be realised.
"Leighton brings to the mine modern and efficient mining methods that are safe, environmentally friendly and efficient."
Leighton LLC will prepare the Khushuut mine for production, including associated mobilisation of pre mining equipment and personnel and undertake pre-mining work. Leighton LLC will also prepare a detailed mine plan for the 3 million tonnes per annum mining operations following on MEC’s already approved general mine plan.
Leighton LLC is prepared to incur capital expenditure for ordering the first fleet of mining equipment and MEC the credit support. Leighton LLC and MEC are also finalising the definitive 6-year contract for Leighton LLC to provide resources to carry out the mining operations based on agreed principal terms and pending approval with the detailed mine plan and final definitive terms.
MEC Chief Executive Officer James Schaeffer Jr. said the MEC-Leighton cooperation represented a major step towards the commencement of mining operation at the Khushuut coal mine.
"We are delighted to conclude with Leighton this initial phase of service engagement, and we look forward to materialising a much longer term mining cooperation with Leighton in the foreseeable future," Schaeffer Jr said.
"With our 310 km Khushuut Road foundation substantially completed and our prospective customer in Xinjiang having received our bulk product sample for full scale testing, MEC is well on track to commence coal production.
"Our Khushuut brand of premium coking coal will be sold to the western part of China, where coking coal of such premium quality is in great and growing demand."
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