Ovoot coking coal project consists of one mining license and two contiguous exploration licenses covering 130km² in the Khuvsgul province in north-western Mongolia.
At 255 million tonne (Mt), Ovoot is considered to hold the second biggest coking coal reserves in Mongolia, after the Government-owned Tavan Tolgoi mine.
The Ovoot project is being developed by Aspire Mining, an Australia-headquartered metallurgical coal and infrastructure company focused on coal export from Mongolia.
The project is expected to produce up to 10Mtpa (million tonnes per annum) of coking coal over 21 years of mine life.
The development of the Ovoot coking coal project is linked with the 547.7km Erdenet-Ovoot railway project being developed by Northern Railways, a Mongolian subsidiary of Aspire Mining, as part of the Mongolian Government’s Northern Rail Corridor plan to create an international rail link connecting Russia, northern Mongolia and China.
The feasibility study for the Erdenet-Ovoot railway project was completed in April 2018.
The start of production from Ovoot project will coincide with the commissioning of the Erdenet-Ovoot railway, which is expected in 2023.
Ovoot coking coal project development history
Aspire Mining became 100% owner of the Ovoot coking coal property by acquiring Khurgatai Khairkhan in February 2010. Extensive drilling was conducted on the property until 2013.
The prefeasibility study for the project as completed in May 2012 and Aspire obtained mining license for the project in August 2012.
The feasibility study for the project was approved by the Mineral Resource Authority of Mongolia in 2013.
The capital expenditure for the project was estimated to be $144m.
Ovoot coking coal project geology and reserves
Ovoot high-quality coking coal project covers 430km² of mining and exploration license in the Selenge Basin, the biggest coking coal basin of Mongolia.
The Ovoot deposit is mostly contained in two seams within the Mogoin Gol formation. The thickness of the upper seam ranges between 1.6m and 46.5m, while the lower seam ranges between 4.7m and 33.7m in thickness.
Majority of the Ovoot coal reserves are present within 250m below the earth surface, which can be extracted through open-pit mining operation based on a single large open pit of 7km length and 2km width.
Ovoot project was estimated to contain 247Mt of probable open-pit coking coal reserves and 8Mt of probable underground coking coal reserves, as of 2013.
The project was estimated to contain 188Mt of probable marketable coking coal reserves.
Mining and processing at Ovoot
Coal mining at Ovoot will be initially based on truck and shovel open-pit operation producing five million tonnes of coal a year.
It will be preceded by 23 million bank cubic meters (BCM) of waste removal to pre-strip the overburden.
Underground mining will be deployed later to ramp up the production to 10Mtpa.
Higher ash coal will be washed at 300Mtpa wash plant near the mine and will be mixed with bypass coal in a 40:60 ratio, to produce cut-off grade coking coal with 13% ash.
The coking coal from Ovoot will be transported via Ovoot-Erdenet railway to the new 10Mtpa coal blending facility at Sainshand in southern Mongolia, where it will be blended with other coals delivered by the Trans-Mongolian Railway, before being railed to Chinese and Russian customers or to Chinese ports for export.
Aspire Mining has already signed an off-take agreement with Chinese and Russian customers for up to 7.4Mtpa of non-binding coking coal.
Contractors involved with Ovoot coking coal project
Xstract Mining Consultants completed the pre-feasibility study for the project in May 2012.
Australia Independent Diamond Drilling Company, Landrill International and Major Drilling Group International carried out drilling on the Ovoot coking coal property from 2010 to 2012.
Sedgman provided the wash plant design for the Ovoot coking coal project, while the wash plant simulation was carried out at ALS Maitland pilot-scale wash plant in New South Wales.
Coal quality tests for the project were carried out at SGS Laboratories in Tianjin, China.
Details of Erdenet–Ovoot railway project
Estimated to cost $1.25bn, the 547.7km Erdenet-Ovoot railway project is being developed by Aspire Mining’s subsidiary Northern Railways in collaboration with China’s state-owned China Gezhouba Group Corporation (CGGC).
Currently owned by Aspire Mining (80%) and Noble Group (20%), Northern Railways was granted an exclusive 30 years concession by the Mongolian Government to build and operate the Erdenet-Ovoot Railway in August 2015.
Upon completion, Erdenet-Ovoot railway will form part of the international rail corridor linking Russian Trans-Siberian Railway with China through Northern Mongolia and also complement China’s One Belt Road initiative.
Erdenet-Ovoot railway is strategically important for Aspire Mining’s wholly-owned Ovoot project as well as the Nuurstei coking coal project near Erdenet, in which it has 90% interest.