(EnergyAsia, November 15 2010, Monday) — Canada’s Prophecy Resource Corp said it has received the final permit to start operations at its Ulaan Ovoo coal mining project in Mongolia.

Prophecy said it has a 100% interest in the 208.8 million tonne (174.5 Mt Measured, 34.3 Mt Indicated) and (35.9 Mt Inferred) Ulaan Ovoo mine that features bituminous (5,204 kcal/kg), low ash (12.46%), low sulphur (0.40%) thermal coal suitable for export markets. The deposit features a single massive coal seam 45-80 m thick with an average strip ratio of 2:1.

The coal will be delivered from the open pit mine to the Nauski TransSiberian station 120km away and onto Russia’s eastern seaports where they will be exported to customers in Asia.
Thermal coal prices are trading at two-year highs at Russian seaports, thanks to strong Asian demand.

Leighton Engineering has been contracted to mine and truck the coal to the rail station where they will be delivered either south to local Mongolian thermal power plants or north to Russia by rail.

Vancouver, British-Columbia-based Prophecy is working to finalise coal sales contracts with Russian entities.

One of a few international mining companies to achieve such a significant milestone, Prophecy said it will hold an opening ceremony for the production-ready mine located 10km from the Russian border on November 20.

John Lee, CEO of Prophecy, said: “On behalf of Prophecy shareholders, I would like to thank the government of Mongolia for the expeditious manner in which this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia.

“Prophecy directly and indirectly (through Leighton Asia) employs over 65 competent Mongolian nationals and four expats. The company also wishes to reaffirm its commitment to deliver coal to local Edernet and Darkhan powerplants in Mongolia.”

The Mongolian government has granted the project a fully transferable 30-year mining licence that can be extended by another 40 years. The project has met Mongolian environmental approvals as per the Ministry of Nature and the Environment which approved a Detailed Environmental Impact Assessment (DEIA) and Environmental Protection Plan (EPP) specifically for Ulaan Ovoo.