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Aspire Mining soars 22% on confirmation of high-quality fat coking coal at Ovoot

Summary

  • AKM stock is riding high on encouraging test results reaffirming the attractiveness of the Ovoot fat coking coal.
  • The Ovoot fat coking coal has been demonstrated to exhibit remarkable caking, fluidity, and plastic properties across a broad temperature range.
  • The Ovoot coking coal is well suited to fit in the highest category for fat coking coals in line with the Chinese Coal classification system.

The shares of Aspire Mining Limited (ASX: AKM) jumped 22% in early trade today following the Company’s update on the encouraging test results from Ovoot samples. AKM stock settled the day’s trade at A$0.086 on 27 May 2021, gaining 16%.

Aspire reported fresh laboratory results based on an indicative Ovoot sample, which reaffirmed previous results indicating that Ovoot is a high-quality fat coking coal. Notably, the Company is committed to developing metallurgical coal assets in Mongolia, with primary focus on its 100% owned Ovoot Coking Coal Project (OCCP).

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Encouraging Fat Coking Coal Test Results

SGS in Tianjin, China, tested a 60kg sample of fresh coking coal indicative of Ovoot’s Upper Seam, the focus of the Ovoot Early Development Project. The testwork has confirmed robust coal quality.

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Source: AKM update, dated 27 May 2021

After reviewing the SGS data, the Company’s coal processing adviser and coal technologist Ross Brims commented, “Ovoot would be expected to be classified at the highest category of fat coking coals available to the Chinese steel industry.” Experienced in pre-qualification of coking coals into the Chinese market, Brims also boasts of extensive coal processing experience in Mongolia, Australia, and China. 

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As per the AKM update, Ovoot’s coal would be classified as FM 36# Metabituminous Coal under the Chinese coking coal classification system. Moreover, within the Russian coal classification system, Ovoot Coking Coal also fits within the Coking Fat (KZh) and Fat (Zh) coking coal categories. 

Source: AKM update, dated 27 May 2021

Lucrative Market Potential for High-Quality Fat Coking Coals

High-quality fat coking coals currently command significant usage value in the Chinese steel industry with import limitations imposed on Australian hard coking coals. To meet the escalating demand, China depended on imports to make up for the shortfall since 2009. The Asian country is not self-sufficient in sourcing hard coking coals.

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With the addition of quality fat coking coals, steel mills can add lower quality coking coals into the batch compared to what hard coking coals could carry to make quality coke.

Aspire has indicated that fat coking coals such as that from Ovoot would be used between 5% and 10% of a coke batch for supporting the carrying ability of the limited supply of prime hard coking coals.

The Company plans to collaborate with Russian and Chinese institutes to pre-qualify the coal before commencing marketing activities. 

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Wide Plastic Range – A Key Fat Coal Characteristic

The wide plastic range makes a fat coal important to add to blends, because it can be combined with several other types of coals with narrower melting ranges. 

The characteristic of a wide plastic range (>95oC) makes a fat coal an integral component of a coke blend, whereby it remains plastic longer and bonds with other already resolidified components. 

Meanwhile, in the plastic range, fat coal displays a high level of fluidity. This facilitates the plastic fluid to mix thoroughly with the blend and encapsulate the inert components. Thus, high fluidity allows the coal to mix well with other coals in the batch. 

Finally, the plastic layer (Y Index) effectively bonds with the particles from other coals. Notably, the thicker plastic layer is considered better as  a greater plastic material volume produced (indicated by the upper end of Y Index: 25-35mm) means a greater capacity to carry a higher load of inert components.

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