Mongolia Coal Shipment Milestone for Terra Energy LLC

15th of 9, 2014

The first 8000t shipment of coking coal from its South Gobi mine on 24 August,has been hailed as a major boost for Terra Energy LLC - a subsidiary company of Guildford Coal Limited of Australia. The shipment was from the Baruun  Noyon Uul coking coal mine located in Noyonsoum, Umnugobi province. The first shipment was moved through ShiveeKhuren border port.

 During this challenging market condition, Terra Energy LLC has been able to commission the mine in such a short period of time. The company is aiming at mining and exporting 500 thousand tonnes per year.

This latest development comes after 9 months of negotiations with regulatory approval agencies in Mongolia. The final piece of the jigsaw was sign off on a permit to utilise a 98 kilometre haul road linking the BaruunNoyonUul Mine (BNU) to the Chinese border crossing at ShiveeKhuren/Ceke.  It signals the critical next phase of progress to a commercial mine operation.

Australian Minister for Trade and Investment, Hon Andrew Robb, welcomed the progress as a positive sign for Australian companies seeking to invest in Mongolia.
“Australian mining interests have a growing interest in sharing their expertise with Mongolia for the benefit of both countries. This trend will continue with the expansion of bi-lateral relations between our two countries,” Minister Robb said.
In total 60 participants including representatives of the Ministry of Mining, MRAM, Governor’s Office of Umnugobi province, Guildford Group MD, Peter Kane, Tsogt T, Director of Теrra Energy LLC, Mr. Natsagdorj, Deputy Governor, management of Noyon and Gurvantessoums, SSIA, Customs and Border Port offices attended a special ceremony to mark the event.
The importance of the new mine was not lost on Deputy Governor Natsagdorj, who welcomed the commencement of shipments as an important boost for the local area.

Tsogt T, Director of Теrra Energy LLC
, said his company sent geologists to the mine site just 3 years ago.
“During this period of time, we completed the exploration and technical study work, had the reserve approved, established the mine, obtained the permit from the state commission and today we are starting the coal export. In Australia, all such works take at least two times longer.

“We appreciate and are thankful for the support from the Government, the Province and Soum Governors and local citizens.
“In particular, we have emphasized the environmental issues and are working to ensure sustainable environmental and safety standards are achieved which meet international standards.

“In conducting mining activities Terra Energy strives forward with all our heart.  We have been contributing to the local development, especially, supplying the hay to herders during the winter dzud period and paying the tuition for students studying at universities.In terms of the human resource, we maintain the policy of employing local people of soums and province.
“As of today we have a coal reserve of 19 million tonnes of coking coal in the area of the “BaruunNoyonUul” mine. The plan is to mine 500 thousand tons of coal per year under the approved feasibility study.

“We are cooperating with the world larger companies “Noble” and “Sojitz” to export our products to the international market,” Mr Tsogt said.

Guildford’s MD, Peter Kane, stressed there was now a clear pathway to a fully operational coal mine.
He said the next priority for Terra would be to finalise negotiations with a number customers in China to secure long-term offtake agreements for the BNU coking coal brand.
Mr Kane said Guildford’s entry into a project in Mongolia had proved a valuable learning experience for the company.

“The first shipment has occurred in just over 3 years since Guildford acquired the Mongolian project which is a remarkable achievement.  
“Partnering with local suppliers and working closely and patiently with important local and Government stakeholders to build support have been critical success factors.”
“There are lessons here for other Australian resource companies,” he said.

“There is no lack of support for resource projects in Mongolia but there is a clear need for proponents to identify the benefits that flow back.
“The Mongolian government has established transparent ground rules for new entrants and small to medium miners are very well placed to take up opportunities across the sector,” Mr Kane said.

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