The Asia Miner

JAN-FEB 2018

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

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8 | ASIA Miner | Volume 15 • Issue 1 | 2018 THE improving copper outlook led by supply dynamics and the positive future for electric vehicles puts Mongolia in a very good po- sition to benefit, enhanced by its location next to the world's largest copper consumer. This is not only good news for the massive Oyu Tolgoi (OT) Cop- per-Gold Project, which is majority owned by Rio Tinto through Tur- quoise Hill Resources, but also for the junior explorers – Xanadu Mines, Kincora Copper and Erdene Resource Development Corp – who have prospective land packages in the country's south and southwest. Kincora Copper president and CEO Sam Spring says the outlook for copper is a supply story. "There have been years of under invest- ment and the industry will struggle to keep up. "Where new discoveries are going to be made is in frontiers like Mongolia. Here you have security of tenure, you can do business and are within trucking distance of the world's biggest consumer – it is a good place to be. "If electric vehicles come through and the demand side improves, that is just extra leverage to the story," he adds. While Mongolia's geology or prospectivity hasn't changed, and its licensing system is barely altered, what has shifted significantly is infrastructure thanks largely to OT and the massive Tavan Tolgoi (TT) Coal Project in the country's south. Xanadu Mines Managing Director and CEO Andrew Stewart says infrastructure has come flooding in. "This is what happens when you have discoveries like OT and TT – they generate their own in- frastructure. "In the south, the ground preparation has been made for rail through the region, and I believe in the next two to three years there will be a railway." Major mining hubs Erdene Resource Development Corp's President and CEO Peter Akerley says there are three major hubs for mining activity in Mon- golia. "In the north is the Erdenet copper mine around which are developed and developing coal, iron ore and gold mines that have mature rail, road and power but also some recent rail spurs added and new lines planned. "In the south, there is the TT-OT hub, which has experienced sig- nificant growth in infrastructure and utilities over the past decade with paved highways, rail lines under construction, power plants, major water reservoir development, new power grids and a tremen- dous increase in trained labour pool. "As you move west into the south-western Gobi and our focus area, you have a cluster of coal developments controlled by publicly listed and private companies centred on the Narin Sukhait area. These have spurred the construction of paved roads to the border, significant rail construction across the border in China as well as the development of services, handling and storage facilities at Ceke, just across the border in China. "All of this development contributes ultimately to lower capital and operating costs for all new mining developments through easier access to transportation and utilities, and a much deeper support network of mining services and increased labour supply," he says. All about discoveries As a lot of companies around the world seek copper projects, An- drew Stewart says it is all about discoveries. "The global buzz is the potential for new discoveries mirrored by the situation in Ecuador where there has been a land rush. Howev- er, it is much harder to get ground there than in Mongolia. It is also a harder and costlier place to operate. "In Mongolia, we are drilling some good holes. Other companies are doing the same. The world's biggest copper producer, Codel- co, has some good projects in Ecuador, but is starting to look at Mongolia again." He says there is still potential to make some globally significant discoveries, particularly in underexplored places such as Mongolia. "There were seven years of limited exploration. Suddenly, this has changed, with companies beginning to explore. "The buzz is not quite what it was eight years ago. Owing to the fact that not a lot of exploration has occurred, companies do not have as many projects. "Everywhere has its challenges for explorers. I have worked in the Philippines, Indonesia, Myanmar, Greece, Bulgaria, Romania, Ka- zakhstan, China – you name it – but Mongolia is still the easiest place in the world to work in." Mongolia ready to hitch a ride on copper Copper concentrate being produced at the Oyu Tolgoi Copper-Gold Project in southern Mongolia. Kincora Copper's White Pearl exploration camp in the Gobi Desert of south- ern Mongolia.

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