Coal explorer Modun Resources has signed a binding Memorandum of Understanding (MoU) with the Mongolian Ministry or Mining and the Ulaanbaatar City Air Quality Agency (CAQA) supporting the supply of coal briquettes.
Under the terms of the MoU, Modun is responsible for developing a coal mine and constructing a coal briquette plant at its Nuurst Coal Project, subject to raising the appropriate finance. Modun is also responsible for delivering the quantity of coal briquettes as detailed in the terms and conditions of the offtake agreement under negotiation with the Mongolian Government.
The Ministry has committed to providing the necessary policy support required by Modun to deliver the project and CAQA agrees that its related organization will purchase the coal briquettes for the next five years. CAQA will also be responsible for monitoring the quality of the briquettes to ensure they meet the standards of the National Committee of Air Pollution Reduction. The MoU has a term of five years.
Modun’s managing director Rick Dalton says, “The signing of the MoU is an important and final precursor to endorse the formal offtake agreement for the supply of coal briquettes to the Mongolian Government. The MoU clearly outlines the responsibilities of the Government departments and ensures each party’s interests are aligned and focused on delivering the project.
“The negotiations for the offtake agreement continue to progress well and have now moved into the final stage of discussions.”
Regarding the Nuurst project the independent consultants appointed by Modun have completed the feasibility study required by Mongolian Law, subsequent to attaining the mining licence. Modun is undertaking a final review of the study with the consultants prior to submitting it to the Mineral Resources Authority of Mongolia.
Nuurst is a thermal coal project which encompasses a 2497 hectare mining licence area. It has a 478 million tonne JORC reported coal resource with 326 million tonnes in the measured category, 104 million in the indicated category and 48 million inferred tonnes. The project is 120km south of Ulaanbaatar and 6km from existing rail infrastructure which links directly into China.