OYU TOLGOI, Mongolia (AFP) — At a remote outpost in the Gobi Desert, hundreds of kilometres from any paved road, Keith Marshall is poring over satellite images, geological surveys and sheets of statistics, literally mapping out Mongolia's economic future.
Working out of a wind-lashed military-style tent dubbed the "Weather Haven", the British engineer is laying the groundwork for what he says will be one of the biggest copper mines in the world.
Oyu Tolgoi, or Turquoise Hill, will have the capacity to churn out a million tonnes of copper each year, as well as gold, a potentially big boost to this impoverished country's economy, which still relies heavily on Soviet-era infrastructure and donor aid money.
Sandwiched between Russia and China, Mongolia has a population of just 2.7 million people spread over an area more than double the size of France. The average salary is just 200 dollars a month.
"Oyu Tolgoi is going to bring dividends to the Mongolian people for four or five generations to come," said Marshall, managing director of Ivanhoe Mines Mongolia, the Canadian company that owns the exploration license for the site.
Shafts will be sunk to 1,300 metres (4,200 feet) and a two-kilometre (1.2-mile) wide pit will be excavated.
The copper concentrate will be shipped to neighbouring China and eventually find its way into cell phones, laptop computers and cars around the world.
But Oyu Tolgoi has been the subject of much controversy and has yet to win final government approval, with the issue stirring vigorous debate from nomad camps in the Gobi to the streets of Ulan Bator and the halls of parliament.
A final contract between the government and Ivanhoe has been held up several times by angry street protests, as citizens have demanded a greater percentage of the profits.
Members of parliament have revisited the issue dozens of times but have yet to find a balance with Ivanhoe, although the protests have subsided.
In a compromise, Ivanhoe agreed to give the government a 34 percent stake in the project, which Marshall estimates will require between six and 10 billion dollars of investment to make fully operational.
The government has since indicated it wants a 51 percent share, while critics also point to other problems.
"No one in Mongolia has the experience to handle such a huge mine, not the people nor the government," said Sainkhuugiin Ganbaatar, president of the Mongolian Trade Union and onetime leader of the street protests.
"So we must not rush into a deal with a foreign mining company until we fully understand what is at stake."
Ganbaatar, regarded as a non-partisan voice in Mongolia's often intense brand of democracy, is demanding a full appraisal of the mine from an independent body that has no affiliation with Mongolia or its government.
As time passes, however, the mining company has grown increasingly restless.
"The project has reached a stage of development where we can't do much more work without an agreement. We have had to scale down operations, which means laying off workers and letting projects sit idle," said Marshall.
But investor confidence remains strong.
Rio Tinto recently bought a 9.9 percent stake in Ivanhoe Mines Ltd. and has an option to go up to 46 percent within five years after an investment agreement is signed with the Mongolian government.
Recent elections that gave the ruling Mongolia People's Revolutionary Party a clear majority in parliament following four years of an uneasy coalition have given Ivanhoe further hope that a deal can be done by the end of the year.
If work starts soon, Marshall expects to see profits start pouring in by 2013.
In the meantime, the 500 workers at Oyu Tolgoi keep the project going.
An exploratory shaft has been sunk to almost 1,400 metres and a mixed team of expatriate and Mongolian miners are now drifting laterally towards the main body of ore, nicknamed Hugo Dummett.
Hugo will keep the miners busy for 30 years or so, after which they can tap the nearby Heruga deposit, big enough to give the project another 20 years of life.
The mine is expected to employ 5,000 people, with thousands more coming to fill out of the supply chain expected to grow around the mine.
Tuesday, September 2, 2008
Red Hill Energy Receives Government Environmental Approval for 208.8 Million Tonne Coal Project
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 2, 2008) - Red Hill Energy (TSX VENTURE:RH) announced today that a Detailed Environmental Impact Assessment (DEIA) and Environmental Protection Plan (EPP) for its Ulaan Ovoo coal project have been approved by the Mongolian Ministry of Nature and the Environment. Under Mongolia's 2006 Minerals Law and 1995 Environmental Protection Law, approval of the DEIA is required before the project can be developed. The Ulaan Ovoo Project is now fully compliant with all necessary environmental legislation.
The Ulaan Ovoo Coal Project has already been granted a fully transferable mining licence from the Mongolian government. The mining license is valid for 30 years and is extendible for an additional 40 years. Upon receipt of the project's forthcoming prefeasibility study (see June 16, 2008 press release) the Company will be well positioned for rapid advancement.
The environmental study was prepared by Ecos LLC, an independent Mongolian environmental consulting company. Ecos LLC is one of the companies licensed by the Ministry of Nature and Environment to conduct environmental impact statements on behalf of large mining projects. The studies considered social and labour issues, climate and environmental circumstances of the project area, and potential environmental impacts of a full mining operation, among other things. The study concluded that there are no major impediments to mining Ulaan Ovoo and provided recommendations on best practices for conservation of the environment and community.
The DEIA also assessed the local public opinion of the project. It found that a large majority of the local residents and soum (township) government support the project. Opening of the Ulaan Ovoo Mine is highly anticipated because of its potential to bring new jobs and industries to the local economy. The long-term economic boost to the region will be high, spanning an approximately 20- to 40-year mine life.
Red Hill Energy's President Ranjeet Sundher stated that:
"The granting of government environmental approvals is a very significant step forward on our path to development and operations at Ulaan Ovoo and it is equally good news for the people of Mongolia. Regionally the project will provide many good quality and high paying jobs and nationally it will generate revenues to benefit all Mongolians."
Ulaan Ovoo contains 208.8 million tonnes of high quality thermal coal (174.5 Measured, 34.3 Indicated) with an additional 35.9 million tonnes inferred. It is situated approximately 17 kilometres (km) south of the Russian/Mongolian border and is located within 120 km of either Russia's (north) or Mongolia's (east) central railroads. The railroads offer transportation options to the world's 3 largest coal importing markets of Japan, Taiwan and South Korea. Ulaan Ovoo's coal quality is particularly desirable in these markets due to its low ash, low sulphur, low nitrogen, high volatile matter and its high calorific value averaging 5,092 kcal/kg or 9,165 BTU/lb (on an as-received moisture basis).
These markets can be accessed via either of Russia's massive coal exporting centers, Vladivostok or Vanino. On the other hand, China's vast coal markets and Mongolia's main domestic coal market are accessible by rail to the south. Mongolia's Zelter River is in immediate proximity to Ulaan Ovoo and assures the project of abundant water. Ulaan Ovoo coal is carried primarily in a single, near surface coal seam averaging approximately 60 meters in thickness. The stripping ratio on the first 120 million tonnes of Ulaan Ovoo coal averages less than 1.4:1. At an annual production capacity of 6 million tonnes, this would support a 20-year mine life. Seven exploration licenses 100% controlled by Red Hill Energy are in adjacent and/or surrounding basins and may lead to a significant increase to the resource base.
Red Hill Energy's total 100% owned, high quality thermal coal resources in Mongolia, located in 2 coal basins, presently stands at over 1 billion tonnes (503.5 Measured, 503.6 Indicated) with an additional 444.9 million tonnes inferred. Red Hill's Chandgana coal projects are located in east/central Mongolia 160 km east of Mongolia's central railroad. CVRD of Brazil also controls an independent and very large coal project in this basin which is contiguous to Red Hill's resource properties.
The Ulaan Ovoo Coal Project has already been granted a fully transferable mining licence from the Mongolian government. The mining license is valid for 30 years and is extendible for an additional 40 years. Upon receipt of the project's forthcoming prefeasibility study (see June 16, 2008 press release) the Company will be well positioned for rapid advancement.
The environmental study was prepared by Ecos LLC, an independent Mongolian environmental consulting company. Ecos LLC is one of the companies licensed by the Ministry of Nature and Environment to conduct environmental impact statements on behalf of large mining projects. The studies considered social and labour issues, climate and environmental circumstances of the project area, and potential environmental impacts of a full mining operation, among other things. The study concluded that there are no major impediments to mining Ulaan Ovoo and provided recommendations on best practices for conservation of the environment and community.
The DEIA also assessed the local public opinion of the project. It found that a large majority of the local residents and soum (township) government support the project. Opening of the Ulaan Ovoo Mine is highly anticipated because of its potential to bring new jobs and industries to the local economy. The long-term economic boost to the region will be high, spanning an approximately 20- to 40-year mine life.
Red Hill Energy's President Ranjeet Sundher stated that:
"The granting of government environmental approvals is a very significant step forward on our path to development and operations at Ulaan Ovoo and it is equally good news for the people of Mongolia. Regionally the project will provide many good quality and high paying jobs and nationally it will generate revenues to benefit all Mongolians."
Ulaan Ovoo contains 208.8 million tonnes of high quality thermal coal (174.5 Measured, 34.3 Indicated) with an additional 35.9 million tonnes inferred. It is situated approximately 17 kilometres (km) south of the Russian/Mongolian border and is located within 120 km of either Russia's (north) or Mongolia's (east) central railroads. The railroads offer transportation options to the world's 3 largest coal importing markets of Japan, Taiwan and South Korea. Ulaan Ovoo's coal quality is particularly desirable in these markets due to its low ash, low sulphur, low nitrogen, high volatile matter and its high calorific value averaging 5,092 kcal/kg or 9,165 BTU/lb (on an as-received moisture basis).
These markets can be accessed via either of Russia's massive coal exporting centers, Vladivostok or Vanino. On the other hand, China's vast coal markets and Mongolia's main domestic coal market are accessible by rail to the south. Mongolia's Zelter River is in immediate proximity to Ulaan Ovoo and assures the project of abundant water. Ulaan Ovoo coal is carried primarily in a single, near surface coal seam averaging approximately 60 meters in thickness. The stripping ratio on the first 120 million tonnes of Ulaan Ovoo coal averages less than 1.4:1. At an annual production capacity of 6 million tonnes, this would support a 20-year mine life. Seven exploration licenses 100% controlled by Red Hill Energy are in adjacent and/or surrounding basins and may lead to a significant increase to the resource base.
Red Hill Energy's total 100% owned, high quality thermal coal resources in Mongolia, located in 2 coal basins, presently stands at over 1 billion tonnes (503.5 Measured, 503.6 Indicated) with an additional 444.9 million tonnes inferred. Red Hill's Chandgana coal projects are located in east/central Mongolia 160 km east of Mongolia's central railroad. CVRD of Brazil also controls an independent and very large coal project in this basin which is contiguous to Red Hill's resource properties.
UK's Polo Resources finds 'significant' coal seam in Mongolia
Aim-listed Polo Resources has intersected a “significant” coal seam at its Hud prospect, in Mongolia, the company affirmed on Tuesday.
The firm has completed a 1 029-m, nine-hole appraisal drilling programme, in which all but one hole intersected coal.
Further, a coal seam of 16,5-m apparent thickness was intersected at depth in one of the holes, which indicated that thicker coal could be present at depth, and the early holes only drilled the thinner upper seams, the company said.
The company would test the coal for coking properties and planned to carry out a further appraisal of the deeper coal seams, deputy chairperson Neil Herbert said in a statement.
The firm has completed a 1 029-m, nine-hole appraisal drilling programme, in which all but one hole intersected coal.
Further, a coal seam of 16,5-m apparent thickness was intersected at depth in one of the holes, which indicated that thicker coal could be present at depth, and the early holes only drilled the thinner upper seams, the company said.
The company would test the coal for coking properties and planned to carry out a further appraisal of the deeper coal seams, deputy chairperson Neil Herbert said in a statement.
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