PERTH (miningweekly.com) – The Baruun Noyon Uul (BNU) mine, in Mongolia, is poised to supply its first coal after production was restarted in November 2016.
ASX-listed TerraCom said on Thursday that coal was now flowing from the mine and stockpiles were being built up in preparation for delivery to Kingho group once Chinese borders reopen following the New Year.
TerraCom and Kingho in November 2016 entered into a five-and-a-half-year offtake agreement for hard coking coal produced at BNU.
Coal deliveries to Kingho will start from February 10.
Meanwhile, a feasibility study on the BNU on-site coal handling and preparation plant (CHPP) has been approved by the Minerals Professional Council, with start-up and commissioning of the plant expected to begin by mid-2017.
TerraCom said on Thursday that the Mongolian CHPP strategy provided a pivotal asset in controlling the volume and quality of the coal supplied from BNU into China and would allow the company to increase the cash operating margin of BNU through a freight cost reduction, as clean coal will only be transported into China.
The CHPP is expected to have a throughput capacity of some 170 t/h to 250 t/h and will have a plant life of around 15 years.