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- China's rising demand for coking coal presents a promising potential for Mongolia-based metallurgical coal assets held by Aspire Mining Limited.
- The Ovoot Early Development Plan (OEDP) of Aspire Mining aims to deliver up to 4Mtpa to end markets in China and Russia through trucks and rail operations.
- Communist Party, in a significant annual meeting, would be unveiling China's Five-Year Development Plan for 2021-2025.
The growth trajectory for the metallurgical coal assets held by Aspire Mining Limited (ASX:AKM) seems to be encouraged by China's infrastructural developments.
Significantly, the increasing steel production that utilizes coking coal as key material has tremendously improved demand potential for coking coal that would be produced Ovoot Cooking Coal Project (OCCP) in Mongolia.
Aspire's coal-related exploration assets' market opportunities could see another phase of growth as China gears up for further developments.
What to Expect from China's Economic Growth Plan?
The Chinese Government is to kick off the most significant annual meeting of the year this week, charting out plans for further accelerating the developments to stimulate the economy. The political gathering is even more critical as the Government would highlight China's 14th Five Year Development Plan for 2021-2025.
The Chinese economy performed way above expectations, carrying the day despite the COVID-19 induced trade challenges. Chinese President Xi Jinping in November indicated that their lies potential for doubling the Chinese economy by 2035.
Further GDP growth is expected to rely on economic developments, and the country could see specific targets for steel production.
Other China-related Factors Suiting Aspire's Project Potential
China National Coal Association indicated that the country's coal consumption is anticipated to continue rising in 2021. However, the country coking coal reserves have depleted, and the low quality of domestic coking coal does not go well with China's growth agenda. As a result, reliance on imported coal to supplement the demand has been at the forefront of its growth strategy.
The Five-Year Plan comes at a time when China has banned coal imports from Australia. Consequently, Chinese buyers have also turned to other producers for meeting the supply of coking coal.
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Mongolia's strategic location in close proximity to China, allows convenient road/rail transportation of coal and puts the flagship Ovoot project of Aspire Mining at a vantage point. Notably, OCCP hosts high quality 255 Mt JORC Coal Reserves that could sustain full-scale production of saleable coking coal of up to 10 Mtpa over long mine life.
The Ovoot Early Development Plan (OEDP) focuses on delivering up to 4Mtpa to end markets in China and Russia through a truck and rail operation.
Aspire is manoeuvring its efforts to make the most of the Market Potential
The Company's efforts are in tow with the opportunities to export its coal to China and other attractive markets. Despite the COVID-19 challenges, the Company advanced well to accelerate Ovoot's development.
During the December 2020 quarter, COVID-19 restrictions delayed the holding of a local community meeting required for completing the Detailed Environmental Impact Assessment (DEIA) for the OEDP, with all other parts of DEIA already complete. To commence the project development, the DEIA must be submitted and approved by Mongolia's Ministry of Nature, Environment and Tourism.
Aspire continues to pursue active engagement with the local Tsetserleg community, with the Company involved in several corporate social endeavours to assist local Tsetserleg soum Government and communities.