Aspire Mining has received an independent Chinese Coal Market Report commissioned by the company from a leading coal consultancy firm in China confirming the marketability of a blended coking coal product called Mongolian Blend. This is a blend of between 25-50% Aspire’s Ovoot project indicative coking coal and other Mongolian selected thermal and non-coking coals.
The report was commissioned to assess the marketability and indicative pricing of the Mongolian Blend in order to complete a scoping study to support the development of a regional coal blending facility at the Sainshand Industrial Park located along the Trans-Mongolian Railway in southern Mongolia.
The report confirmed that the Mongolian Blend would be classified as a ‘JM’ primary coking coal according to Chinese coal classifications. This blend is considered ‘similar or even better than those primary coking coals imported into the China market from countries like Australia, the USA and Canada’, due to its medium ash, low sulphur and high G value.
Indicative relative pricing for Mongolian Blend product provided by the consultant was benchmarked on a well-known and referenced Chinese JM coking coal CFR Tangshan Port price and is net of logistics costs to the Mongolia/China border at Zamyn Uud/Erenhot. Preliminary internal analysis by Aspire, including this price relativity, indicates a positive cashflow blending operation to be based as Sainshand based on current pricing.
Sainshand is 240km from the Mongolia/China border and provides a strategic location for a coal blending operation. Aspire has signed a non-binding MoU to become a key future supplier to the industrial park and in September 2004 received a coal blending concept study completed by German engineering firm Tenova Takraf.
The consultant also confirmed that continued demand increases from the Chinese steel industry will see China import more coking coal from Mongolia and the seaborne market, with the supply gap expected to grow from 51 million tonnes in 2013 to 83 million tonnes by 2020.
Primary coking coals, such as the Mongolian blend, are in particular high demand within China primarily due to the low ratio of these coals in China’s own coal reserves and the growing requirement for higher quality coking coals in the coke industry.