A Mongolian industrial company has signed an initial non-binding Memorandum of Understanding relating to future potential coal supply, with Auminco Mines. Auminco, an unlisted public coal development company, is the subject of a takeover offer by Viking Mines and to date more than 97% of Auminco’s shareholder base has accepted the offer.
The MoU, signed with the Darkhan Metallurgical Plant (DMP), is the third agreement secured for Auminco’s Berkh Uul Bituminous Coal Project in northeast Mongolia. DMP is a Mongolian State-owned joint stock industrial company located close to Darkhan City in the northern region of Mongolia.
Viking’s chairman Jack Gardner says DMP is expanding its current 100,000 tonnes/annum steel milling capacity, based on commencement of mining of iron ore deposits located near Berkh Uul, with the expansion due for completion in 2015.
“This MoU confirms that there is significant local industrial demand for Berkh Uul coal and gives us great confidence that there is potential to further expand our customer base,” Jack Gardner says.
The non-binding MoU, signed with Auminco’s Mongolian subsidiary BRX LLC, states DMP’s intent to enter into future purchase agreements for Berkh Uul project coal. As with the earlier MoU’s from Darkhan Power Station and Erdenet Power Plant, it also establishes testing of a bulk sample as a basis for technical evaluation of the coal.
The Berkh Uul project is 200km east of Darkhan City, within 40km of rail access to the existing Trans-Mongolian Railway, which provides a transport link to Darkhan to the south and Russia to the north. www.vikingmines.com