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A recent report from Greenpeace found that China’s coal consumption declined in the first half of this year and new Chinese government data suggests that the country’s coal imports have dropped. Estimates indicate that by the end of the year, China’s coal imports could be 8 percent below 2013 levels.

China imported 18.86 million tonnes of coal in August, the lowest level since September 2012.

Part of the reduced demand is due to a slowing Chinese economy. After years of double-digit growth rates, China’s GDP expanded by just 7.7 percent in 2013, and it could struggle to hit its 7.5 percent target this year. Some analysts are predicting an average growth rate of only 6 percent in the next few years.

But a lower GDP growth rate is only part of the reason. As the Sierra Club’s Justin Guay points out, China may be beginning to “decouple” its growth from coal consumption. In other words, China’s economy could continue to expand even while its coal consumption drops – something unthinkable not long ago.

That’s due in large part to China’s declared “war on pollution,” announced earlier this year.

Years of increasingly choking smog have sparked public anger and even led to protests. In 2013, a government survey of 74 Chinese cities found that all had pollution levels that exceeded levels the World Health Organization deems safe.

“We will resolutely declare war against pollution as we declared war against poverty,” Premier Li Keqiang said in March. The plan calls for the closure of old and dirty steel, cement, and coal plants: An estimated 1,725 small-scale dirty coal plants are expected to be shuttered. The government also declared it would spend $275 billion in the next three years to reduce pollution.

China has also set up environmental courts, instituted fines for offenders of environmental standards, granted non-governmental organizations the right to sue polluters, and now requires the nation’s largest factories to disclose pollution data to the public.

The efforts are starting to pay dividends, as evidenced by declining coal import levels. This is a major reason that international coal prices have reached their lowest levels in six years. And the low prices are not succeeding in stoking a resurgence in demand.

And more declines could be coming, thanks to a series of proposed new laws. The central government released a draft version of a law on Sept. 10 that amounts to an outright ban on coal with a high sulfur and ash content. This could significantly hurt coal exporters, like Australia and South Africa.

The government is also seeking to cut coal production by 10 percent because low demand is causing economic losses for 70 percent of China’s coal companies.

Moreover, China is considering a permanent limit on the overall consumption of coal. The current five-year plan aims for consumption of 4.1 billion tonnes of coal in 2015, up from 3.7 billion tonnes in 2013. But in the next five-year plan, which will run from 2015-2020, China could cap its coal consumption at the same 4.1 billion tonnes-per-year level, and even ratchet it downwards.

And in 2016, efforts to slash coal demand will likely only accelerate, considering China’s announcement that it will introduce a nationwide cap-and-trade program. Details are murky, but if successfully implemented, major producers will be incentivized to improve efficiency and switch to cleaner sources of energy.

As the world’s largest consumer of coal, as well as the world’s largest emitter of greenhouse gases, the significance of China’s policies on coal use cannot be overstated. Thanks to a concerted effort by the government to improve air quality, the era of insatiable Chinese demand for coal could be over.


By Nick Cunningham of


China burns almost as much coal as the rest of the world combined and is reliant on the fossil fuel for two-thirds of total energy consumption and 80% of its electricity generation.

2013 was the 14th consecutive year of rising thermal coal consumption, output and imports for the country – albeit at a slower pace – but 2014 could become a turning point.

China has implemented a number of measures – so far without any major effect – to drive down coal mining output and consumption of close to four billion tonnes per year as part of its “war on pollution”.

The country has enacted curbs on consumption, imposed bans on new coal-fired power plants and place limits on its total energy consumption.

China also recently announced it will launch a national emission trading scheme in 2016 in addition to seven regional schemes, creating the largest emissions market in the world.

As a result of these measures Chinese coal imports have steadily declined over the past year and are now at their lowest level since late 2012 even though (efforts to clamp down on small scale mines like the one pictured have been largely unsuccessful).

Today’s price is half the peak hit early 2011 and a far cry from the $190-plus the commodity averaged in July 2008

As yet unpublished regulations banning the import of low-quality coal and placing restrictions on production at the 14 largest domestic coal miners, could really start to move the needle.

The latest regulations banning high-ash and high-sulfur coal imports could slash overseas cargoes by another 80 million tonnes, while the output cuts at domestic producers could take some 190 million tonnes off the market.

This could provide a boost for coal prices – benchmark Australian Newcastle export coal has fallen from the mid-$90 a tonne range in January to below $70 this week as supply continued to rise in the face of moderating consumption .

Bloomberg reports coal prices may advance 10% in the fourth quarter and according to Shi Yan, a Shanghai-based analyst the recovery could gain momentum:

“Coal prices have started to show a recovery since the moment the government decided to step in. The recovery may accelerate going forward.”

The first signs are already evident on Chinese markets with the Bohai-Rim coal index, a Chinese benchmark, rising nearly 1% to 482 yuan ($79) a tonne early, snapping an almost three-month losing streak according to Bloomberg.

A boost to the prospects for thermal coal could also come from India, where the country’s highest court recently ruled that many of the 218 coal licenses issued to companies since 1993 were awarded illegally.

In July India’s government mooted plans to let state-run Coal India (NSE:COALINDIA), the world’s largest producer of thermal coal, to increase imports and pool it with domestic supply after it was reported that close to a half of the country’s coal power plants only have enough stocks to last a week.

Wall Street Daily reports, research by Macquarie Bank estimates India’s imports could rise by and additional 38 million tonnes. According to a separate study the expected rise in imports would absorb nearly 90% of the seaborne coal surplus this year.

Frik Els

Aspire Mining closer to developing Ovoot Project with China-Mongolia ties Aspire Mining closer to developing Ovoot Project with China-Mongolia ties(0)

Aspire Mining is a step closer towards developing its Ovoot Coking Coal Project in Mongolia after Chinese PresidentMr Xi Jinping official visit to Ulaanbaatar last week upgraded ties between the two countries to a comprehensive strategic partnership.

For Ovoot, the agreements reached between the two countries will provide:

1. More efficient transport across border points on the Mongolian-Chinese border

2. Ability to negotiate rail access to a number of Chinese North-Eastern seaports

3. Potential access to Chinese financing set aside specifically for mineral resource and infrastructure development in Mongolia.

Mr Xi visit to Mongolia was the first by a Chinese head of state in 11 years and comes on the 65th anniversary of the establishment of diplomatic relations between two countries.

His trip was intended to support Mongolia’s bid to export its goods via a trans-shipment route through China, enhancing trade and economic cooperation between the two countries.

Source – Proactive Investors

Aspire Mining closer to developing Ovoot with China-Mongolia ties Aspire Mining closer to developing Ovoot with China-Mongolia ties(0)

Aspire Mining (ASX:AKM) is a step closer towards developing its Ovoot Coking Coal Project in Mongolia after Chinese President Xi Jinping’s official visit to Ulaanbaatar last week upgraded ties between the two countries to a comprehensive strategic partnership.

For Ovoot, the agreements reached between the two countries will provide:

-    More efficient transport across border points on the Mongolian-Chinese border;
-    Ability to negotiate rail access to a number of Chinese North-Eastern seaports; and
-    Potential access to Chinese financing set aside specifically for mineral resource and infrastructure development in Mongolia.

President Xi’s visit to Mongolia was the first by a Chinese head of state in 11 years and comes on the 65th anniversary of the establishment of diplomatic relations between two countries.

His trip was intended to support Mongolia’s bid to export its goods via a trans-shipment route through China, enhancing trade and economic cooperation between the two countries.

“This state visit by the Chinese President is an important milestone in Sino-Mongolian relations and should lead to the significant increase in trade sought through to 2020,” managing director David Paull said.

“Coal exports will be a leading contributor to this increase in trade.

“The agreements for access to a number of seaport options for Mongolian coal will also assist in attracting investment into the sector.”

China/Mongolia Ties

During President Xi’s visit, 24 Memoranda of Understanding and Agreements were signed outlining strategic cooperation initiatives between the two countries in sectors including infrastructure development, financing, education, trade, and tourism.

Many of the Agreements were related to infrastructure development within Mongolia, and access to both rail and north-eastern sea ports in China to not only facilitate increased levels of trade bilaterally but also internationally.

Six seaports, including the major ports of Tianjin, Dalian, and Jinzhou were named to enable Mongolian exports to seaborne markets. Border crossing co-operation and access to rail capacity within China was also covered.

China also agreed to participate in a trilateral summit between Russia, Mongolia and China with trade and security interests being high priorities. A date for the summit is to be agreed.

Mongolia is also set to host an official visit from the Russian President Vladimir Putin during the first week of September, where it is expected a number of similar agreements between Russia and Mongolia will be signed. 

The visits to Mongolia by both Heads of State from China and Russia signify the importance of Mongolia to its closest neighbours and the beginning of long term trilateral cooperation.

Ovoot Coking Coal Project

The agreements add to the progress that Aspire has achieved for the wholly-owned Ovoot project in northwestern Mongolia as well as the key Northern Line Rail Line (NRL).

Current offtake interest in Ovoot coking coal exceeds targeted production with MoUs signed for up to 7.4 million tonnes per annum, or 148% of planned initial production.

The project – along with the Tavan Tolgoi Coal operation – has also been recognised as one of the key potential coal suppliers to Mongolia’s Sainshand Industrial Park.

It has also signed a non-binding MoU to sell up to 250,000 tonnes of oxidised coal per annum to Zavkhan Power Station about 70 kilometres south of Ovoot.

This provides a potential revenue stream from a product that would otherwise have been considered a waste material.

The MoU includes the construction of transmission infrastructure that will allow the supply of 35 megawatts of power per year to Ovoot.

Aspire is also focused on progressing the 547 kilometre NRL that will extend a multiuse railway from Erdenet towards western Mongolia.

It continues to reduce overhead expenditure while waiting on approval to begin construction.

SMEC International has also been commissioned to prepare an updated rail operating cost model.

Non-binding expressions of interest have been received from a number of financial institutions that include the Noble Group for provision of a total US$1.3 billion to construct the railway based on the 2013 Rail Pre-Feasibility Study.

The line has previously been forecasted to be completed in 2018 and will have capacity to carry up to 22 million tonnes per annum of multi-user capacity that includes commodities, goods, and passengers.

Notably, a Mongolian Parliamentary Standing Committee has approved draft amendments to Mongolia’s 2010 National Rail Policy. 

The amendments include the extension of the Trans-Mongolian Railway from Erdenet to Mogoin Gol (near Ovoot), and to the Russian border at Arts Suuri.

These amendments were debated in Parliament on 1 July 2014 and are expected to continue to be debated when Parliament resumes. 

The extension of rail to Arts Suuri and the Russian border has potential long term transport benefits for the Ulug Khem Coal Basin (also known as the Elegest Coal Basin) in Russia’s Tuva province. 

Aspire recently met with a number of holders of coal deposits in this region and there is scope for cooperation on infrastructure and marketing with Aspire over the medium to long term.

Separately, the company has started a Scoping Study with Tak-Raf to assess feasibility of a 10 million tonne per annum coal blending operation at the planned Sainshand Industrial Park.

The agreements between China and Mongolia will benefit Aspire Mining by providing boosting trade, particularly of coal exports. 

More specifically, it will provide the Ovoot Coking Coal Project more efficient transport across border points; allow negotiations for rail access to a number of Chinese North-Eastern seaports; and potentially access Chinese financing.

Access to seaports will also assist in attracting investment.

Proactive Investors continues to maintain a 6 – 9 months share price target of $0.125 per share subject to the rail concession being granted for NRL.

The rail concession will be a catalyst for a major re-rating of Aspire’s share price. 

Aspire had $3.5 million in cash as of 30 June 2014.

Prophecy Coal Consolidates Chandgana Nyalga Coal Basin, and Enrolls a Mongolian Shareholder to its Power Subsidiary Prophecy Coal Consolidates Chandgana Nyalga Coal Basin, and Enrolls a Mongolian Shareholder to its Power Subsidiary(0)

VANCOUVER, BRITISH COLUMBIA, Aug 18, 2014 (Marketwired via COMTEX) — Prophecy Coal Corp. (“Prophecy” or the “Company”) (PCY)(otcqx:PRPCF)(frankfurt:1P2) is pleased to announce that it has entered into binding agreements with Cosmo Coal LLC (“Cosmo”) to:

1.Consolidate the assets of Prophecy's wholly-owned subsidiary, ChandganaCoal LLC ("Chandgana Coal") with the assets of Tugalgatai Mining LLC("Tugalgatai"), which is a wholly-owned subsidiary of Cosmo, into:Chandgana Tugalgatai Coal LLC, a newly-incorporated Mongolian company ofwhich, Prophecy will own 51% and Cosmo will own 49%.2.Transfer, for nominal consideration, 34% of the issued and outstandingshares of Prophecy's wholly-owned subsidiary, Prophecy Power GenerationLLC ("PPG") to Cosmo.3.Accept Cosmo's nomination of one new member to Prophecy's Board ofDirectors.

These actions are collectively referred to below as the “Transaction”.

Further, Cosmo and Prophecy signed a non-binding intent letter in July whereby Cosmo agreed to assist PPG in securing a concession agreement and power purchase agreement, and Prophecy agreed to use its best efforts to bring to the power plant project equity investors, secure bank financing, and manage the equipment procurement and construction cycle.

Background and Rationale:

Chandgana holds the following exploration and mining licenses (collectively, the “Chandgana Licenses”):

NI43-101 Compliant ResourceName(million tonnes)(i)---------------------------------------------------------------------------Khavtgai Uul Exploration License XV-011654509 measured, 539 indicatedChandgana Tal Mining License MV-016767110.9 measuredChandgana Tal Mining License MV-01012613.5 measured---------------------------------------------------------------------------Coal Resources---------------------------------------------Chandgana LicenseMeasuredIndicatedTotal---------------------------------------------------------------------------Chandgana Tal124.40.0124.4Khavtgai Uul509.3538.81,048.1Total633.7538.81,172.5---------------------------------------------------------------------------

Tugalgatai holds the following mining licenses (together, the “Tugalgatai Licenses”):

NI 43-101 Compliant ResourceName(million tonnes)---------------------------------------------------------------------------Tugalgatai Mining License MV-017399N/ATugalgatai Mining License MV-017401N/A

The Tugalgatai Licenses contain an estimated coal resource of 2.33 billion tonnes according to official records from the Minerals Resource Authority of Mongolia. The resource is considered a historic estimate derived from records prepared previously by a wholly-owned subsidiary of Vale S.A. This historic estimate was prepared to meet the Mongolian classification standard which may differ significantly from the Canadian Institute of Mining standard, was not prepared in accordance with NI 43-101, and uses resource categories that differ from those required under sections 1.2 and 1.3 of NI 43- 101. The Company is unaware of the key assumptions, parameters and methods used to prepare the historic estimate and additional work would be required to verify the historic estimate as current mineral resources or reserves in accordance with NI 43-101. Prophecy expects to conduct exploration to prepare an NI 43-101 complaint estimate of the contained resource covered under the Tugalgatai Licences.

The Chandgana Licenses are contiguous to the Tugalgatai Licenses. The coal resources covered by the respective licenses are contained in the Nyalga Coal Basin located in Khentii Province in central Mongolia (see attached maps). The coal seams are continuous across the basin and outcrop to the north, with the main coal seam measuring up to 60m in thickness. The Chandgana Tal resource covered under mining licenses, located in the northeast part of the basin, is anticipated to be the starter pit with thick average coal seams of 40 meters and a mining strip ratio of 0.7 to 1.

By consolidating the resources of the Nyalga Coal Basin through the Transaction, Prophecy will control one of the largest undeveloped coal deposits in Mongolia. The Nyalga basin contains an abundant source of coal that is situated in an ideal location to develop major power, coal to gas, and coal to liquid projects. Consolidating control of the basin makes for the following positive attributes:

--It is located within only 5kms from the well-paved, trans-Mongolianhighway, which should reduce construction and transportation costs;--It is 135kms from Bagannur, which is connected to Ulaanbaatar via dual220kv power transmission lines;--It is located 350kms from the nearest border to China;--The coal resource consists of thick coal seams under shallow overburdenmaking for favourable mining economics.--The coal deposit contains low ash (i.e. less than 10%) and sulphur (i.e.less than 1%), with gross heat value of 3,300 to 3,600kcal/kg;--The resources are located under flat surfaced land with no nearbyforests, rivers or other features that would be an environmentalconcern;--Approved land use rights are included which cover 5.5 square kms thatare designated for power plant and industrial development;--Approved environmental and construction licenses for the 600MW powerplant are included; and--Prophecy's projects enjoy support from the local and regionalcommunities.

If the 600MW power plant and coal mine begin operation, PPG and Chandgana are expected (based on current statistics) to be the largest private employer in Khentii province, and the largest private revenue contributor to the province.

The above land use rights, power plant construction and environmental licenses are all held by PPG, of which Cosmo will become a 34% shareholder (with Prophecy retaining 66%) upon completion of the Transaction.

Having a significant Mongolian shareholder in PPG could pave the way to the signing of a concession agreement and power purchase agreement with the Mongolian government.

Prophecy and Cosmo have met representatives from some of the world’s largest thermal power plant and coal to gas/coal to liquid developers. It is expected that the Transaction will bring about greater economies of scale, and enable synergies to fast-track the development of these projects.

The Transaction is expected to close by October 2014, subject to regulatory approval. The technical contents of this news release have been reviewed and approved by Christopher M. Kravits, P.Geo, who is a Qualified Person as defined in NI 43-101. Mr. Kravits has 35 years of relevant US and international coal geology experience. He has been working actively in Mongolia since 2007.

(i) Khavtgai Uul and Chandgana Tal resource estimates are based on:

Updated Technical Report on the Coal Resources of the Chandgana Khavtgai Coal Resource Area, Khentii Aimag, Mongolia prepared by Kravits Geological Services LLC, dated September 28, 2010 Technical Report Coal Resources and Preliminary Economic Assessment Coal Mine Component Chandgana Tal Coal Project, Khentii Province, Mongolia prepared by John T. Boyd Co., dated February 2014.

About Prophecy

Prophecy Coal Corp. is a Canadian public company listed on the Toronto Stock Exchange that is engaged in developing energy projects in Mongolia. Further information on Prophecy Coal can be found at

About Cosmo

Cosmo Coal LLC is a Mongolian private company that is 100% owned by Mongolian shareholders with significant financial resources and experience in mining.




Executive Chairman

Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this news release, including statements which may contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions, and statements related to matters which are not historical facts, are forward-looking information within the meaning of applicable securities laws. Such forward-looking statements, which reflect management’s expectations regarding Prophecy’s future growth, results of operations, performance, business prospects and opportunities, are based on certain factors and assumptions and involve known and unknown risks and uncertainties which may cause the actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. These estimates and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies, many of which, with respect to future events, are subject to change and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by Prophecy. In making forward-looking statements as may be included in this news release, Prophecy has made several assumptions that it believes are appropriate, including, but not limited to assumptions that: there being no significant disruptions affecting operations, such as due to labour disruptions; currency exchange rates being approximately consistent with current levels; certain price assumptions for coal, prices for and availability of fuel, parts and equipment and other key supplies remain consistent with current levels; production forecasts meeting expectations; the accuracy of Prophecy’s current mineral resource estimates; labour and materials costs increasing on a basis consistent with Prophecy’s current expectations; and that any additional required financing will be available on reasonable terms. Prophecy cannot assure you that any of these assumptions will prove to be correct.

Numerous factors could cause Prophecy’s actual results to differ materially from those expressed or implied in the forward looking statements, including the following risks and uncertainties, which are discussed in greater detail under the heading “Risk Factors” in Prophecy’s most recent Management Discussion and Analysis and Annual Information Form as filed on SEDAR and posted on Prophecy’s website: Prophecy not having a history of profitable mineral production; the uncertainty of mineral resource and mineral reserve estimates; the capital and operating costs required to bring Prophecy’s projects into production and the resulting economic returns from its projects; foreign operations and political conditions, including the legal and political risks of operating in Mongolia, which is a developing jurisdiction; title to Prophecy’s mineral properties; environmental risks; the competitive nature of the mining business; lack of infrastructure; Prophecy’s reliance on key personnel; uninsured risks; commodity price fluctuations; reliance on contractors; Prophecy’s need for substantial additional funding and the risk of not securing such funding on reasonable terms or at all; foreign exchange risks; anti-corruption legislation; recent global financial conditions; the payment of dividends; and conflicts of interest.

These factors should be considered carefully, and readers should not place undue reliance on the Prophecy’s forward-looking statements. Prophecy believes that the expectations reflected in the forward-looking statements contained in this news release and the documents incorporated by reference herein are reasonable, but no assurance can be given that these expectations will prove to be correct. In addition, although Prophecy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Prophecy undertakes no obligation to release publicly any future revisions to forward-looking statements to reflect events or circumstances after the date of this news or to reflect the occurrence of unanticipated events, except as expressly required by law.

To view the maps accompanying this press release please visit the following link:

Contacts:Prophecy Coal Corp. - Investor Relations:Mirza

SOURCE: Prophecy Coal Corp.

(C) 2014 Marketwire L.P. All rights reserved.


Coal markets are awash with the fossil fuel as supply rises and demand comes under pressure, which it is likely to push prices for the commodity near the lowest in five years, reports show.

According to data from UBS AG and Bank of America, published by Bloomberg, exports are not expected to move up much, even with a higher seasonal demand for coal as the Northern Hemisphere heads into winter.

The forecast average price of coking coal, used for steel making, is expected to stay around $125 a tonne for the rest of the year, compared with $159 in 2013.

Outlook for thermal coal, used mainly for energy generation, is not much healthier. The Australian and New Zealand Banking Group forecasts an average price this year of $74 per tonne, against $84 a year ago. ANZ Research says the situation is “unlikely to improve in the near, or medium, term” and has downgraded price estimates for the next three years.

Coal at Newcastle, the Asian benchmark price, dove last month to $67.05 a ton, the lowest since September 2009, Bloomberg reported. The dark combustible closed at $68.10 during the week ended Aug. 1, well below $72, the figure at which much as one fifth of global exports lose money, according to Morgan Stanley.

While the short-term estimates seem quite gloomy, ANZ is a tad more optimistic in the longer-term and it says that reduced capital expenditure on new mine capacity in Australia and Indonesia will “plant the seeds” for a tighter supply backdrop and price recovery in 2016 and 2017.

Cecilia Jamasmie

Image by Przemek Tokar

Viking Mines signs second coal MoU with Mongolian power authorities Viking Mines signs second coal MoU with Mongolian power authorities(0)

Viking Mines (ASX:VKA) has signed a second future coal supply agreement with a Mongolian Government power authority for its Berkh Uul Bituminous Coal Project in northern Mongolia.

This further validates the rationale for Viking to takeover Auminco Mines and Berkh Uul’s potential to deliver high quality thermal coal.

The non-binding Memorandum of Understanding was signed with Erdenet Power Plant State Owned Stock Company (EPP), a major supplier of electricity to the Erdenet copper mine.

“The fact that Berkh Uul Project continues to be recognised by the Mongolian Government as a potential key supplier of coal to the EPP is a further significant milestone in the development of the project,” managing director Peter McMickan.

“Auminco’s ongoing discussions with domestic end-users continue to confirm a local industrial demand in northern Mongolia for unwashed Berkh Uul coal, due to its low ash, low sulphur and relatively high calorific value.

“This second MoU provides more evidence of the potential customer base for Berkh Uul’s coal.”

Erdenet Power Plant

The Erdenet Power Plant is a 36 megawatt power plant that consumes about 250,000 tonnes of coal per annum.

The MoU relates to the intent by EPP to enter into future purchase agreements for Berkh Uul coal.

It also establishes a basis for technical evaluation of the quality and quantity of coal, which includes testing of a bulk sample.

This follows an earlier agreement with Darkhan Thermal Power Plant, the major supplier of electricity to Mongolia’s second largest city, the commercial and industrial centre of Darkhan, and the northern region of Mongolia.

Berkh Uul

Berkh Uul is 100% owned by Auminco Mines. It is located 400 kilometres north of Ulaanbaatar in Northern Mongolia, and within 40 kilometres of rail access into Russian off-take markets.

It is currently held under an exploration permit that covers 4,550 hectares and is valid until 2015. A Mining Lease application is imminent.

RungePincockMinarco has completed an Independent Geological Report in March 2014 that was based on 45 diamond drill holes and estimated a JORC (2012) Indicated Resource of 21.4 million tonnes, and Inferred Resource of 16.9 million tonnes, for a total of 38.3 million tonnes of near surface and high quality bituminous coal.

Evaluation of raw unwashed coal quality shows: moisture content of 19.8%, ash 15.5%, sulphur 0.37%, and calorific value of 5,323 kcal/kg.

This work also identified the presence of multiple, shallow dipping sub-parallel coal seams on the eastern limb of a gently folded syncline, with individual seams of 0.6 – 4.5 metres over a 3 kilometre strike length that extends to a depth of 200 metres.

Viking has received acceptances for 97.08% of Auminco under its takeover offer of 60.6 Viking Shares and 20.2 Viking Options for every 100 Auminco Shares held.


While not binding, this second MoU from Mongolian power authorities confirm a local industrial demand in northern Mongolia for unwashed Berkh Uul coal, due to its low ash, low sulphur and relatively high calorific value.

Auminco’s ongoing discussions with domestic end-users continue to bear fruit. It is further evidence of the potential customer base for Berkh Uul’s coal.

It is clearly being recognised by the Mongolian Government as a potential key supplier of coal to the EPP which should underpin the development of the Project.

Importantly, this sould fast track the development of Berkh Uul over the next 12 – 18 months.

We believe that Viking Ashanti can develop a small scale operation that could generate a conceptual free cash flow of up to US$3-5 million.

Our projected valuation for Viking Ashanti is $0.085 to $0.165 per share. This compares to its current share price of $0.04 per share.

Aspire Mining and Noble Group to develop Nuurstei Coking Coal Project Aspire Mining and Noble Group to develop Nuurstei Coking Coal Project(0)

Aspire Mining (ASX:AKM) continues to develop its alliance with Noble Group with an agreement to acquire a 50% interest in the Ekhgoviin Chuluu Joint Venture (ECJV) that holds a 60% interest in the Nuurstei Coking Coal Project in northern Mongolia.

The project will be acquired from Xanadu Mines (ASX:XAM) at a highly favourable price.  Noble holds the remaining 50% interest in ECJV.

It will issue Xanadu 10 million Aspire shares upon the ECJV entering into an agreement to undertake feasibility studies in the Nuurstei Project area.  Or, upon the Mineral Resource Authority of Mongolia granting a mining license over all or part of the Nuurstei Project area.

Nuurstei contains a low volatile bitumous coal with moderate to high ash levels and low sulphur.

There may be operational and marketing synergies with its Ovoot Coking Coal Project.

“Aspire is very pleased to become involved in developing the Nuurstei Project in partnership with the Noble Group as we investigate the possibility of a start to production from the Nuurstei Project pre-rail,” managing director David Paull said.

“There are many potential synergies with the Ovoot Coking Coal Project, not the least of which potentially being an important initial customer for Northern Railways LLC.”

Transaction Details

– 10 million shares in Aspire to Xanadu on the feasibility studies being undertaken in the Nuurstei Project area or upon the Mineral Resource Authority of Mongolia granting a mining license.

– Aspire has also agreed to issue a further 5 million shares in the event that 30 million tonnes of JORC compliant resources are identified in the Nuurstei Project area.

– Aspire will assume Xanadu’s obligation to pay for an additional interest in the Nuurstei Project and will pay the minority vendors in the Nuurstei Project US$200,000 on the grant of a Mining License over the project area.

The ECJV will then hold a 90% interest in the Nuurstei Project. The minority interest of 10% will be free carried through to production.

Noble will retain their 50% interest in the ECJV, along with marketing rights over all Nuurstei Project production.

Both companies have also agreed to work together to identify additional near term Mongolian coking coal production opportunities with terms to be agreed on a case by case basis.

The transaction fits within the company’s strategy to explore and develop Mongolian metallurgical coal projects.

Nuurstei Coking Coal Project

Nuurstei is located just 10 kilometres from the Khuvsgul provincial capital of Moron.

It was acquired by the ECJV in mid-2011 and immediately had drilling success. Subsequent test work has shown that the Nuurstei Project contains a low volatile bitumous coal with moderate to high ash levels and low sulphur.

Washed coal has high indicative coking properties however further testwork is required.

It is relatively close to a public sealed road that is currently being constructed that connects Moron to Erdenet.

The project is also located within a relatively short trucking distance to the proposed Northern Rail Line being developed by Aspire’s subsidiary, Northern Railways LLC.

Preliminary indications are that Nuurstei Project coking coal could also be a useful blending partner for Aspire’s wholly owned Ovoot Project coking coal, and there would be a number of other operational and marketing synergies between the two operations.


The acquisition of Xanadu Mines’ 50% interest in the Ekhgoviin Chuluu Joint Venture provides Aspire Mining with another coal project in Mongolia.

The price appears very reasonable with no upfront cash outlay and staged issuance of shares.

As well it enhances the existing alliance with Noble Group which includes a number of transactions relating to project financing, supply chain logistics, port and rail capacity access.

That alliance partner Noble Group holds the remaining 50% in ECJV, which has a 60% interest in the Nuurstei Coking Coal Project, is also encouraging given that both companies are working together on the Ovoot Project.

Also notable are the potential operational marketing synergies between Nuurstei and Ovoot given that the former located within a relatively short trucking distance to the proposed Northern Rail Line.

Aspire Agrees to Buy Mongolia Coal Project Venture With Noble Aspire Agrees to Buy Mongolia Coal Project Venture With Noble(0)

Aspire Mining Ltd. (AKM), the Australian firm developing coking coal assets in northern Mongolia, said it agreed to buy 50 percent of a venture with Noble Group Ltd. (NOBL) to expand its footprint in the Asian nation.

Aspire will issue 10 million shares to Xanadu Mines Ltd., which currently holds the stake in the 50-50 venture with Noble, the Perth-based company said today in a statement. Aspire will give Xanadu a further 5 million shares should the coking coal deposit the venture controls be able to certify that it holds 30 million metric tons of resource.

Noble and Aspire are expanding their partnership in Mongolia, which already involves the Hong Kong-based commodity trader providing project financing, port and rail access for the Australian miner. Noble, which owns 7.7 percent of Xanadu Mines (XAM), is seeking to boost its supply of metallurgical coal from Mongolia as the nation neighbors China, where about half of the world’s steel is produced.

“Noble and Aspire have also agreed to work together to identify additional near term Mongolian coking coal production opportunities with terms to be agreed on a case by case basis,” Aspire said in the statement.

Aspire rose 5.7 percent to 3.7 Australian cents in Sydney trading.

The venture with Noble owns 60 percent of the Nuurstei coking coal deposit that sits between two of Aspire’s projects in northern Mongolia. Coal from Nuurstei could blend with that of Aspire’s Ovoot project, providing marketing and operation synergies, the Australian company said.

A mine at Nuurstei would also help Aspire load the railway route it’s planning to build to connect its northern projects with the east of Mongolia, home of the bulk of the nation’s railroads. This would open up the potential to transport coal south to China or north to Russia.

Aspire said it will make an additional $200,000 payment to Xanadu once Nuurstei wins a mining license. Noble Group retains control of all coal sales from Nuurstei, Aspire said.

Rio Tinto Group’s SouthGobi Resources Ltd. (SGQ) owns 18.8 percent of Aspire, while Noble has a 15 percent stake.

To contact the reporter on this story: Yuriy Humber in Tokyo at

To contact the editors responsible for this story: Jason Rogers at Madelene Pearson, Iain Wilson


The International Energy Agency’s latest forecast of energy trends for the next 20 years predicts a significant fall in the share of fossil fuels in the global energy mix.

Even with widespread deployment of CCS technology, fossil fuels’ proportion of global energy is set to fall from the current 82% to 65% in 2035 according to the IEA’s most likely scenario.

However, at $19.2 trillion, total investment in gas, oil and coal still accounts for around half of total supply-side investment to meet global energy demand.

Annual capital expenditure on oil, gas and coal extraction, transportation and on oil refining has more than doubled in real terms since 2000 and surpassed $950 billion in 2013.

Investment in coal supply is much less expensive per equivalent unit of output than oil or gas; cumulative requirements in mining amount to $735 billion, with a further $300 billion in transportation infrastructure (mainly railways).

The $1 trillion investment needed does not include the actual mining operation nor the costs of transporting the coal

The $1 trillion investment needed does not include the actual mining operation nor the costs of transporting the coal, which typically account for a large share of the delivered cost of coal.

China accounts for around 40% of total capital expenditure on coal over the next 20 years the new report predicts.

The epicentre of increased oil and gas investment activity has been North America, with the rapid expansion of shale gas and tight oil output, but investment in other parts of the world has also been on an upward trend.

Annual investment in upstream oil and gas is predicted to rise to more than $850 billion by 2035, with gas accounting for most of the increase. More than 80% of the cumulative $17.5 trillion in upstream oil and gas spending is required to compensate for decline at existing oil and gas fields.

Around one-quarter of the total goes to producing unconventional resources, e.g. oil sands, tight oil, shale gas.

Gradual depletion of the most accessible reserves forces companies to move to develop more challenging fields; although offset in part by technology learning, this puts pressure on upstream costs and underpins an oil price that rises to reach $128/barrel in real terms by 2035.

Importers of fossil fuels rely for secure supply on the adequacy of investment in resource-rich countries; the investment needed to supply India and China with imported oil and gas over the period to 2035 is more than $2 trillion, a level that helps to explain the push by their national oil companies to secure investment opportunities abroad.

Meeting long-term oil demand growth depends increasingly on the Middle East, once the current rise in non-OPEC supply starts to run out of steam in the 2020s. Yet there is a risk that Middle East investment fails to pick up in time to avert a shortfall in supply, because of an uncertain investment climate in some countries and the priority often given to spending in other areas.

The result would be tighter and more volatile oil markets, with an average price almost $15/barrel higher in 2025.

High transportation costs for gas, compared with other fuels, are a constraint on the prospect of more globalised gas markets. More than $700 billion invested in LNG over the period to 2035 accelerates the integration of regional gas markets and has the potential to reduce current price differentials.

However, the high cost of many liquefaction projects and cost inflation could dampen the hopes of LNG buyers for more affordable supply. Europe’s near-term perspective for expanding LNG purchases is constrained by the need to outbid Asian consumers for available gas.

Frik Els


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