TERRACOM Limited has reached the annual name plate capacity of 1.5 million tonnes from its Baruun Noyon Uul (BNU) Coking Coal Project in southern Mongolia. Short and long-term contracts have underpinned the coal produced at BNU as well as the company’s Blair Athol Thermal Coal Project in Australia.

The company is confident of maintaining production levels during 2018 as the market remains strong in both sectors with coking coal prices and thermal coal prices in respective markets looking to remain strong.

TerraCom has fully commissioned the BNU mine, and in 2017 had commenced export shipments under a 5-and-a-half-year offtake agreement with Kingho Group.

Coal is being simultaneously mined from BNU Pit 2 and BNU Pit 3. Trenching and open hole infill exploration activities have progressed for Pit 4 and Pit 5, which are located progressively along the 50km of projected sub crop of the Noyon Coal Basin held under mining licence by the company. All of these pits will be developed utilising existing infrastructure as a hub.

From 1 July to 26 November 2017, 302,799 tonnes of coal were mined and 299,282 tonnes sold with 74,317 tonnes stockpiled at the mine.

The company has signed long form contracts with Guohua Technology Corporation (GTC) for the design and construction of an onsite coal handling and processing plant (CHPP).

The CHPP will increase the BNU cash operating margin through improved yield and improved product quality control; through bringing a higher proportion of coal mined into the higher value coking market; and through reducing freight costs as clean coal will be transported into China.

In the company’s annual report executive chairman Wal King said, “Although the winter has set in in Mongolia, production levels continue to improve and recently, 8570 tonnes was exported from the mine in a single day, an all-time record for the mine. Pit 3 is producing superior coal quality that is allowing the blending of thermal coal to get down the specifications.

“Planning in respect of a dedicated CHPP at the mine site is continuing. The plant will further improve the overall economics of the mine and the company is scheduled to start construction around the end of February 2018.”

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