The Asia Miner

JAN-FEB 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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14 | ASIA Miner | Volume 15 • Issue 1 | 2018 TERRACOM Limited has reached the annual name plate capacity of 1.5 million tonnes from its Baruun Noyon Uul (BNU) Coking Coal Project in southern Mongolia. Short and long-term contracts have underpinned the coal produced at BNU as well as the company's Blair Athol Thermal Coal Project in Australia. The company is confident of maintaining production levels during 2018 as the market remains strong in both sectors with coking coal prices and thermal coal prices in respective markets looking to re- main strong. TerraCom has fully commissioned the BNU mine, and in 2017 had commenced export shipments under a 5-and-a-half-year offtake agreement with Kingho Group. Coal is being simultaneously mined from BNU Pit 2 and BNU Pit 3. 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. From 1 July to 26 November 2017, 302,799 tonnes of coal were mined and 299,282 tonnes sold with 74,317 tonnes stock- piled at the mine. The company has signed long form contracts with Guohua Tech- nology Corporation (GTC) for the design and construction of an onsite coal handling and processing plant (CHPP). The CHPP will increase the BNU cash operating margin through improved yield and improved product quality control; through bring- ing 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. In the company's annual report executive chairman Wal King said, "Although the winter has set in in Mongolia, production levels con- tinue to improve and recently, 8570 tonnes was exported from the mine in a single day, an all-time record for the mine. Pit 3 is produc- ing superior coal quality that is allowing the blending of thermal coal to get down the specifications. "Planning in respect of a dedicated CHPP at the mine site is con- tinuing. The plant will further improve the overall economics of the mine and the company is scheduled to start construction around the end of February 2018." FOUR years after opening Mongolia's first wind farm, Salkhit, Newcom has opened the country's second wind farm, Tsetsii. Completion of the project is testament to the co-operation of Newcom and SB Ener- gy, a subsidiary of Japanese conglomerate Softbank Group Corp. Construction of Tsetsii Wind Farm started in September 2016 and after one year, a major milestone was reached three months ahead of the construction schedule. The wind farm opened in early October 2016 following completion of site works, including installation of the 25 wind turbines and construction of Tsetsii Substation along with a 32km overhead transmission line connecting to the Central Grid of Mongolia. This achievement followed the project reaching more than 900,000 man-hours without a lost time incident in September 2017. Approximately 500 people worked on construction of the project with 95% be- ing Mongolian. As one of the world's most sparsely pop- ulated countries with very harsh winters, Mongolia faces considerable challenges to provide sufficient heat and electricity for its people, especially in rural areas. However, Mongolia has been identified as having the potential to be a major wind power producer and it is estimated to have more than 1100GW of installed generating capacity, distributed largely in southern and eastern regions. TerraCom reaches annual BNU capacity The Salkhit Wind Farm at work in Mongolia's harsh winter. Country's second wind farm completed The 50MW Tsetsii Wind Farm is financed by the JICA and EBRD. It was JICA's first overseas investment and loan project in the renewable energy sector and the private sector. Danish wind turbine manufacturer Ves- tas was selected as wind turbine supplier and EPC contractor. Among many sub- contractors, Newcom's subsidiary New- com Mining Service LLC was selected by Vestas as balance of plant and civil work contractor. It completed the wind farm's road works, construction of O&M facilities, turbine foundations and project camp management. The Tsetsii Wind Farm will help contribute to sustainable economic development by reducing the amount of imported electricity and mitigate against climate change. Spe- cifically, as a result of the project, it is esti- mated that approximately 230,000 tonnes of greenhouse gas emissions will be dis- placed and 180,000 tonnes of coal and 1.2 million tonnes of water will be saved. Located in southern Mongolia, Tsetsii will contribute further benefits in facilitating infra- structure development for railway, road and electrical services.

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