ASX-listed Aspire Mining has entered into an MoU to mine and purchase raw coal from an existing mine adjacent to the Nuurstei Coking Coal Project in northern Mongolia. The agreement will help in de-risking development of the Nuurstei project.

The adjacent mine is currently being operated to produce small quantities of raw coal for local thermal consumption.

Analysis of the adjacent mine has indicated that it has similar hard coking coal qualities to the Nuurstei project coal. The intended strategy is to wash this coal at Nuurstei for delivery of a washed coking coal to customers in China.

Regular purchases are conditional on the establishment of a wash plant at Nuurstei. The coal purchase pricing will be based on the raw coal pricing received by the owner from existing local sales.

The Nuurstei project is 90%-owned by the Ekhgoviin Chuluu Joint Venture (ECJV), which is a 50/50 joint venture between Aspire and Singapore listed Noble Group. Aspire operates the ECJV and has an option to purchase Noble’s 50% interest, exercisable by June 30, 2017.

The MoU allows for Aspire to provide technical and other assistance as required, including facilitating the mining of 16,000 tonnes of raw coal in 2017 for the adjacent mine to meet its local sales commitments.

The coal purchases are expected to provide around 10% of the feed to the proposed modular coal wash plant to be acquired, constructed and located at Nuurstei.

Aspire’s managing director David Paull said, “The ability to purchase material quantities of coal from an existing mine adjacent to Nuurstei helps in de-risking development and is a further important step in the continuing commercialisation of the Nuurstei Coking Coal Project.”

ECJV also owns a 100% interest in the Erdenebulag Coal Project in the South Gobi region.