ID :
110920
Wed, 03/10/2010 - 17:48
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Shortlink :
https://oananews.org//node/110920
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MONGOLIA ENERGY TO START COAL DELIVERY IN AUGUST
Ulaanbaatar, /MONTSAME/ Mongolia Energy Corp, a former technology company that remade itself into a natural resources developer in 2007, will deliver its first coking coal cargo this August and is looking at projects beyond Mongolia, a senior executive said.
Mineral rich Mongolia is attracting more attention from global investors after a deal in October with Ivanhoe Mines and Rio Tinto to develop the $3 billion Oyu Tolgoi mine, one of the world's biggest untapped copper deposits. MEC, which is still in the money losing, ramp-up phase of developing its Khushuut site in western Mongolia, aims to supply quality coal to China's steel industry, like Hong Kong-listed peer SouthGobi Energy.
Because of Khushuut's location, MEC plans to serve the steel industry in China's Xinjiang Province with Bayi Steel , a unit of China's largest steelmaker Baosteel Group, as its first designated customer. MEC would see cash flow kick in after it started delivery of coking coal to Bayi, Chief Executive James Schaeffer said in an interview during the Reuters Global Mining and Steel Summit on Wednesday.
Khushuut is an open-pit mine in Khovd province of Mongolia. MEC has appointed Leighton Holdings, the world's biggest contract miner, as its contractor for the development.
The miner has also been building a 340 kilometer road linking the Khushuut mining area to the Mongolia-China border, which is about 550 km to Urumqi, the provincial capital of Xinjiang. However, weather problems could periodically cause hiccups in the delivery schedule, Schaeffer said.
MEC aims to sell its coking coal at an FOB price of $120 per tonne versus a production cost of about $35 per tonne. Including transportation, its coal may sell at roughly $165 per tonne. MEC's path from a technology firm to a coal miner has worried some analysts, however.
After the firm announced the move to invest into Mongolia's coal industry, its shares climbed more than 65 times in less than 18 months to a high of HK$18.06 in June 2008. But the lack of an earnings track record in the past few years pushed the stock back to HK$3.81 on Wednesday, down 4.3 percent this year versus a 3 percent loss in the broader market.
S.Batbayar
Mineral rich Mongolia is attracting more attention from global investors after a deal in October with Ivanhoe Mines and Rio Tinto to develop the $3 billion Oyu Tolgoi mine, one of the world's biggest untapped copper deposits. MEC, which is still in the money losing, ramp-up phase of developing its Khushuut site in western Mongolia, aims to supply quality coal to China's steel industry, like Hong Kong-listed peer SouthGobi Energy.
Because of Khushuut's location, MEC plans to serve the steel industry in China's Xinjiang Province with Bayi Steel , a unit of China's largest steelmaker Baosteel Group, as its first designated customer. MEC would see cash flow kick in after it started delivery of coking coal to Bayi, Chief Executive James Schaeffer said in an interview during the Reuters Global Mining and Steel Summit on Wednesday.
Khushuut is an open-pit mine in Khovd province of Mongolia. MEC has appointed Leighton Holdings, the world's biggest contract miner, as its contractor for the development.
The miner has also been building a 340 kilometer road linking the Khushuut mining area to the Mongolia-China border, which is about 550 km to Urumqi, the provincial capital of Xinjiang. However, weather problems could periodically cause hiccups in the delivery schedule, Schaeffer said.
MEC aims to sell its coking coal at an FOB price of $120 per tonne versus a production cost of about $35 per tonne. Including transportation, its coal may sell at roughly $165 per tonne. MEC's path from a technology firm to a coal miner has worried some analysts, however.
After the firm announced the move to invest into Mongolia's coal industry, its shares climbed more than 65 times in less than 18 months to a high of HK$18.06 in June 2008. But the lack of an earnings track record in the past few years pushed the stock back to HK$3.81 on Wednesday, down 4.3 percent this year versus a 3 percent loss in the broader market.
S.Batbayar
