Aspire Mining’s Ovoot Early Development Project: Nods and Approval Forging the Path Ahead

  • Jun 26, 2020 AEST
  • Team Kalkine
Aspire Mining’s Ovoot Early Development Project: Nods and Approval Forging the Path Ahead

Summary

  • Aspire Mining’s OEDP primarily involves the development of road between Ovoot to Murun for easing transportation. 
  • The focus on local communities’ development could foster trust, supporting the approval process.  
  • The company currently awaits Definitive Environmental Impact Assessment (DEIA) which could be a critical element in restarting ground activities. 

Steadily and strategically crafting its way, Australian leading pure-play metallurgical coal project developer, Aspire Mining Limited (ASX: AKM) is advancing well on its world-class Ovoot Coking Coal Project (OEDP). The company’s endeavours remained focused on producing washed coking coal early from the first-stage development of its Ovoot Project. 

Notably, Aspire wholly owns the world-class Ovoot Coking Coal Project and 90% stake in Nuurstei Coking Coal Project, both stationed in Northern Mongolia. The company is pursuing the development of a 560-kilometre special-purpose road to the Erdenet Rail Terminal for conveniently trucking up to 4 million tonnes per annum of washed coking coal. 

The local communities focus of the company has propelled it to positively contribute to a recent supply of 80 tonnes of feed for local herder communities at the request of the Local Government. The donations in terms of face masks, thermometers and protective clothing to the medical facilities seem to further bolster communities for tipping up the local preparations for COVID-19 impacts. 

Meanwhile, Aspire has put the fieldwork on hold after it commenced the definitive engineering study in the March Quarter 2019. Several local approvals have been received, and the company is currently eyeing the truck and rail operation as it awaits the Definitive Environmental Impact Assessment (DEIA) which would be a crucial step in commencing ground activities.

ALSO READ: Aspire’s OEDP Optimistic with Mongolian Investor to Chinese Partners

A Glimpse at the Current Plan

Aspire Mining is currently evaluating a phased development plan on the grounds of firstly building the road between Ovoot to Murun followed by the use of small capacity trucks for delivering coal along the existing Murun to Erdenet Road. At the same time, the company is also constructing the balance of special-purpose road from Murun to Erdenet, which would foster larger heavier vehicle movements when constructed. 

This phased development plan holds attraction as it significantly reduces the road investment required before the start of operations. The proposed road will not only provide the local communities sealed road connection of 200 kilometres between the Mogoin Gol community and the Khuvsgul capital of Murun but also remove the truck traffic from an existing sealed road. 

Post the construction, coal transportation from Murun to Erdenet will be carried along the purpose-built road. Additionally, the existing road would remain dedicated to tourist and local traffic between the two cities.

Approval Landmarks Achieved

Road Approvals

The company received local approvals from the 13 soums along the expected road path of the preferred route. While soums in Bulgan and Orkhan initially approved, the intended road alignment requiring the additional Khuvsgul airmag government approval for authorizing the path within Khuvsgul, has impacted the approvals from the five soums in the Khuvsgul airmag. 

During the March 2020 Quarter, Khuvsgul airmag government studied the Mogoin Gol to Erdenet road alignment and included it in airmag’s 2030 Road Development Plan. The approval now fosters the community engagement with each of the soums and would set the path for final Ministry Approval concerning alignment and definitive engineering study completion. 

Railway Related Endeavours

Aspire’s Mongolian rail infrastructure subsidiary, Northern Railways LLC, retains a Concession Agreement from the Mongolian Government for building and operating 549 kilometres of rail between the town of Erdenet and Ovoot Coking Coal Railway, lying in northern Mongolia. Notably, railway construction is contingent on the achievement of several conditions’ precedent, which includes land access agreements and funding. 

The company on 16 March 2020 secured the time extension of completing the condition precedent for the 30-year Concession for Erdenet-Ovoot Railway Project. Following the negotiation with the Mongolian Government, the Governments National Development Agency granted an extension from February 2020 to 8 September 2021

The company believes the commissioning of the rail line would support low cost and long-term transportation of high-quality washed coking coal up to 10Mtpa from Ovoot. 

Eyeing the potential Approvals 

Aspire Mining for gaining the necessary approvals aimed at progressing the OEDP Definitive Feasibility Study, continues with productive engagement with the communities and local Government at Tsetserleg soum, where Ovoot Project is located. 

The company awaits a key approval from the Ministry for DEIA that will require stakeholder information sharing and engagement, surveys related to flora and fauna, ethnological surveys, and social impact assessments

The company is continuing with productive engagement with the local Tsetserleg soum Government and communities where the Ovoot Project is located to gain the necessary approvals to progress the OEDP Definitive Feasibility Study.

A key approval is to be received from the Ministry of Environment for the DEIA which includes local stakeholder information sharing and engagement, flora and fauna surveys, ethnological surveys and social impact assessments. 

For the OEDP, the company would submit the management and mitigation plans in the approval process. Meanwhile, DEIA scope will address International Finance Corporation’s (IFC) ‘Equator Principles’ for responsible and sustainable development of resource, satisfying international commercial and multi-lateral banks’ funding conditions. 

The company for the receipt of the necessary approvals is targeting the June 2020 Quarter 

ALSO READ: Metallurgical Coal Outlook and Mongolian Stand Vis-à-vis Aspire Mining

AKM traded at AUD 0.092 per share on 26 June 2020, up by ~8%. The stock noted the one-month and three-month return of 28.79% and 25%, respectively.

 


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