Production of coking coal from TerraCom Limited’s Baruun Noyon Uul (BNU) mine in southern Mongolia continues to ramp up to the targeted annual rate of 1.5 million tonnes. The company’s Mongolian subsidiary expects to sell 121,000 tonnes to China this month under an offtake agreement with Kingho.

TerraCom has signed long form contracts with Guohua Technology Corporation (GTC) for the design and construction of an onsite coal handling and processing plant (CHPP) for the BNU Mine Complex with construction expected to commence this quarter.

The CHPP will increase the BNU cash operating margin through improved yield and improved product quality control. It will enable the company to bring a higher proportion of coal mined into the higher value coking market and through reducing freight costs, as clean coal will be transported into China.

TerraCom says the CHPP adds significant NPV value to the existing and future projects in the coal basin held under licence.

Further progress has been achieved according to plan of the multi-pit strategy with first coal mined from BNU Pit 3. Coal will be simultaneously mined from BNU Pit 2 and Pit 3 for the remainder of 2017 and into 2018.

Trenching and open hole infill exploration activities have progressed for Pit 4 and Pit 5, which are located progressively along the 50km of projected sub crop of the Noyon Coal Basin held under mining licence by the company. All of these pits will be developed utilising existing infrastructure as a hub.

TerraCom has fully commissioned the BNU mine in the South Gobi region and export shipments under a 5.5-year offtake agreement have commenced on schedule. The company’s goal is to become one of the largest and highest quality coking coal producers in Mongolia, providing exceptional value for its steel-producing customers.

The company also has the Blair Athol Thermal Coal Mine in Queensland and says it is on target to deliver the annual production rates from both mines, which is a combined 3.5 million tonnes.