- The political stability is expected to provide economic growth fostering additional focus towards the mineralization and export of Coal.
- The strategic ecological emphasis would underpin the approvals for Definite Environmental Impact Assessment (DEIA).
- Mongolia, relatively unaffected by COVID-19, is positioned well to leverage the large-scale resource potential for economic revival.
- The current Ovoot Early Development Project’sfocus on road development is expected to generate infrastructural advantage for resource exploration and community development.
Mongolia saw the massive victory of the current ruling party, Mongolia Political Party in the 2020 elections which promises another round of similar emphasis on the mineral exploration for economic development. The ruling party riding on the back of the Coronavirus success in Mongolia seemed to captivate voter’s preference, thereby marking a substantial win as it gained 62 of 76 parliament seats.
Aspire Mining Limited (ASX: AKM) bolstered by the strategic developments, continues to witness substantial advances in its Ovoot Early Development Project (OEDP), which is stationed in Northern Mongolia. Meanwhile, Mongolia sandwiched between Russia and China recorded only 219 COVID-19 cases while both its neighbouring countries remain battered by the pandemic.
Mongolian economy witnessed substantial growth in recent years backed by rising export demand from China, which is focussed on varying infrastructural development projects. The Mongolian Government’s stance also favours realising the value potential of Mongolia’s abundant resource base. Meanwhile, Mongolia has re-started the coal export to China in early April 2020, once coronavirus cases were under control in the neighbouring country. Increase in exports of Coal, would lead to more supply of Coking coal, which is currently facing supply glut.
In a bid to avoid long delays in the mining projects that further causes economic stagnation, the Mongolian Government last year amended its constitution, strengthening Prime Minister’s power. Notably, the President’s power to veto the legislation for a long period hindered timely execution of mining activities and impacted the implementation of the mineral-resource agendas.
Mongolia’s mineral-rich resources and Aspire Mining notable advances seems to provide robust support to the ongoing OEDP Project developments that are currently awaiting final Ministry approval for the aligning and completing the definitive engineering study.
Ovoot Early Development Project Progressing Well
The OEDP encompasses an open pit development of the Ovoot Coking Coal Project along with trucking up to 4 million tonnes per annum of washed coking coal along a special purpose road of 560 kilometres through to the nearest rail head at Erdenet.
The company received local approvals from the 13 soums along the expected road path regarding the preferred route. Later in the March Quarter, an additional approval of Khuvsgul airmag government which affected permissions from the five soums in the Khuvsgul airmag has been received. Khuvsgul airmag Government following the study of ‘The Mogoin Gol to Erdenet’ road alignment has included it in the airmag’s 2030 Road Development Plan.
Source: AKM ASX Update
The company’s current phased development plan approach involves initially building Ovoot to Murun road and delivering coal using small capacity trucks along the existing Murun to Erdenet Road. Furthermore, for larger heavier vehicle movements, the balance of special-purpose road from Murun to Erdenet is constructed.
Definitive Environmental Impact Assessment (DEIA) Strategic Advancements and Plans
Productive engagement with the local Tsetserleg soum Government is continued for gaining necessary approvals for progressing OEDP Definitive Feasibility Study.
For the DEIA, critical approval is to be received from the Ministry of Environment including, flora and fauna surveys, local stakeholder information sharing and engagement, ethnological surveys, and social impact assessments.
In the approval process, OEDP Management and mitigation plans will be submitted, and DEIA scope would address all ten of the International Finance Corporation’s (IFC).
It would satisfy conditions for funding from international commercial and multi-lateral banks. June 2020 Quarter is targeted for receiving necessary approvals by the company.
By the end of the trading session on 29 June 2020, AKM stock closed at 0.093 per share, up by 1.1% intraday. Notably, the stock as on 29 June 2020 gave the one-month and six-months return of 37% and 35%, respectively.
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