Aspire Mining has entered into a Memorandum of Understanding (MOU) with Erdenes Tavan Tolgoi JSC (ETT) to cooperate on further technical and commercial assessments of blending coking coal from Aspire’s Ovoot project with various coals from the Tavan Tolgoi deposit in Mongolia.
The MOU will see the parties work together to identify optimum Mongolian blends in consultation with target markets.
ETT is a Mongolian Government controlled entity that owns the world-class Tavan Tolgoi Coal Project in Mongolia’s south while Aspire is an ASX-listed company with coking coal deposits in the country’s north.
In 2014 Aspire conducted a number of blending tests with various coals, including non-coking coal from the massive Tavan Tolgoi project, that demonstrated the capacity to blend Ovoot Coking Coal and upgrade the coking ability of other coals. It is expected that over the current life of mine plans there a very significant quantities of non-coking coal to be produced at Tavan Tolgoi without a current viable market to sell into.
The 2014 test work showed that blending relatively low proportions of Ovoot coal, as low as 25% in the blend, resulted in a blended primary coking coal product under the Chinese system.
Under the MOU Aspire and ETT have agreed to share data and samples for further evaluation as well as to establish a technical and commercial working group to prepare a feasibility study into the blending of Ovoot Coking Coal, Tavan Tolgoi non-coking coals and potentially other suitable Mongolia coals in a coal blending facility with an annual capacity of 8 to 10 million tonnes.
In the event that the study is positive, the MOU provides for the two parties to jointly enter into commercial negotiations to establish a blending joint venture and to work together to attract necessary funding.
Aspire’s managing director David Paull welcomed this positive development to work together with ETT to add material value to Mongolian coking coal. He said, “Tavan Tolgoi is by far the largest coking coal deposit in Mongolia with Ovoot being the second largest by reserves a and it appears that there are numerous technical and commercial synergies in working together to improve the value of exported Mongolian coking coals.”