PROPHECY Development Corp has been advised by the Mongolian Government that the Chandgana Mine Mouth Power Plant Project of subsidiary Prophecy Power Generation (PPG) is on a list of advanced and qualified concession projects to be fast-tracked.
In late January 2015, PPG representatives met with the Minister of Industry, who committed to fast-track the list to signing of concession agreements, including one for Chandgana Power Plant, in parliament’s spring session. In February, PPG was notified that a working group had been appointed to work on the concession projects.
PPG is developing the project which includes construction of a 600MW coal-fired mine-mouth power plant in two phases. The plant will be next to Chandgana Tal coal deposit, on which Chandgana Coal, another subsidiary, has mining licences.
Benefits of the plant:
- Air pollution reduction - Studies have linked Ulaanbaatar’s air pollution to respiratory death and miscarriages in women. The Chandgana plant will eliminate the need for additional plants in Ulaanbaatar and reduce dependence on Ulaanbaatar’s existing plants 3 and 4.
- Elimination of coal transport - The plant is proposed to be built next to Chandgana coal mine, 300km east of Ulaanbaatar. This would avoid having to transport 2 to 4 million tonnes of coal into the congested city had the plant been built in the capital.
- Water conservation - Water would be extracted from the mine, which avoids diverting resources from Ulaanbaatar. A water scarcity problem is projected to emerge in Ulaanbaatar and intensify.
- Energy independence - The Chandgana plant would reduce expensive power imports from Russia and China, and help achieve Mongolian energy independence.
- Save money from imports - The tariff proposed by PPG, with exemption from income tax, dividend tax, VAT, and customs duty, would be less than tariffs on imported power.
- Relief from shortages - The plant is expected to begin supplying power to the Mongolian system in 2019 if construction begins in 2016. Mongolian GDP has roughly doubled every five years since 2000. Power demand is expected to double by 2020.
- Stabilization of transmission grid - Prophecy would finance a transmission line from Baganuur to Chandgana in phase 1, and Choir in phase 2.
- Project readiness - The project has been under development for four years and is ready for construction with construction licence, environmental impact assessment, land use rights and mining licences in place.
- Boost to employment - The plant and mine would employ more than 600 full-time staff, bring new support businesses, become the largest revenue generator in Khentii province and double provincial GDP.