Mongolia Energy Corporation (MEC) has selected Leighton as its international mining contractor for the development of Khushuut coal mine project in western Mongolia.
MEC has, at Khushuut, 149 million tonnes of JORC coal resources, substantially coking coal. This is within 600 hectares of 330,000 hectares of MEC’s concession areas in western Mongolia. MEC has built a 310km road foundation which is substantially complete and can transport coking coal from the Khushuut Mine to Xinjiang, China.
MEC’s independent technical review calls for a phased development of the Khushuut mine. The selection of Leighton, initially for a three million tonnes per annum mining operations, and in case of expansion, for up to an eight million tonnes per annum mining operations over time, provides the support for MEC’s actual commencement into mining operations.
Hamish Tyrwhitt, managing director of Leighton Asia, said: “I am excited that Leighton Asia now has two significant mines in operation in Mongolia. Our partnership with MEC on the Khushuut coal mine is the second mine we have commenced this year and will involve a similar level of work to our existing contract at the Ukhaakhudag coal mine in the South Gobi region of Mongolia.
“The extensive potential for mine expansion along with the quality of the coking coal means the mine will become a significant exporter of coal from Mongolia. Once we move from mine planning and pit development to full scale mining, the full potential of the Khushuut mine will be realized. Leighton brings to the mine modern and efficient mining methods that are safe, environmentally friendly and efficient.”
Leighton will prepare the Khushuut mine for production, including associated mobilisation of pre-mining equipment and personnel and undertake pre-mining work. Leighton will also prepare a mine plan for the three million tonnes per annum mining operations following on MEC’s already approved general mine plan.
Leighton is prepared to incur capital expenditure for ordering the first fleet of mining equipment and MEC the credit support. Leighton and MEC are also finalizing the definitive six-year contract for Leighton to provide resources to carry out the mining operations based on agreed principal terms and pending approval with the detailed mine plan and final definitive terms.
James Schaeffer Jr., CEO of MEC, said: “The MEC-Leighton cooperation represents a major step towards the commencement of mining operation at the Khushuut coal mine. We are delighted to conclude with Leighton this initial phase of service engagement, and we look forward to materializing a much longer term mining cooperation with Leighton in the foreseeable future.”