akm news - platts telephone interview

Mongolian News:
The Luxury Frontier (23 June)
http://online.wsj.com/article/SB10001424052702304186404576388153101917860.html#articleTabs%3Darticle

Investors flock to Mongolia (23 June)
http://www.smh.com.au/business/world-business/investors-flock-to-mongolia-20110623-1ggr5.html


AKM News:
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/8039448
Aspire lifts Mongolian coking coal output target to 12 mil mt/year
Singapore (Platts)--24Jun2011/514 am EDT/914 GMT

Australia-listed Aspire Mining said Friday it has raised the eventual production target for its wholly-owned Ovoot coking coal project in Mongolia to 12 million mt/year, from 10.5 million mt/year previously, based on recent coal washability test results.

The results confirmed a high theoretical yield of 80% with 8% ash content, giving Ovoot the potential to be the lowest-ash coking coal producer in Mongolia, Aspire said.

"It is clear from the results that coal from some areas of the deposit may not need to be washed," Aspire managing director David Paull said in a statement. That would result in lower operating costs and less coal washing capacity, he added.

Accordingly, the company has raised its output projection for a second-stage development of Ovoot to 12 million mt/year, assuming run-of-mine coal of 15 million mt/year, which would place Ovoot among the world's largest coking coal mines.

However, Ovoot's first stage development would be a much smaller scale project of 500,000 mt/year-1 million mt/year due to limitations of road trucking capabilities, Paull told Platts in a telephone interview Friday.

The first stage targets a DSO, or direct ship ore, operation that is expected to commence production toward the second half of 2012, pending the submission of a scoping study for approval next month, Paull said.

Output from the first stage of development would be trucked to the nearest rail head at Erdenet and then transported via rail to eastern Russian ports, or south along the Trans Mongolian Railway to China.

Production from the second phase of development is expected to start sometime in 2016, pending the results of a scoping study due for completion at the end of this year, said Paull.

STAGE 2 REQUIRES $1.7 BIL RAIL INFRASTRUCTURE

Ovoot's proposed second stage development into a major coking coal exporter will be related to a 550 km railway infrastructure project with an estimated cost of $1.7 billion, said Paull.

The rail project involves a $500 million, 160 km first section linking the mine site to Moron, the capital city of Khuvsgul province, he added. Aspire would fund the link.

The 390 km, second section of the rail project envisages a roughly $1.2 billion, 20 million mt/year connection between Moron and Erdenet. This section would also provide rail haulage to two other developments -- the Burenhaa phoshate project and the Huren-Chuulet iron ore project, said Paull.

The three projects that would benefit from the Moron-Erdenet rail proposal have obtained backing from the Mongolian governor of Khuvsgu for the infrastructure, Paull added.