(EnergyAsia, April 15 2013, Monday) — Canada’s Erdene Resource Development Corp said it has recruited Vancouver-based Teck Resources Ltd after terminating its seven-year-old alliance with the local subsidiary of Swiss firm Xstrata to develop coal mining projects in Mongolia.
Teck, one of Canada’s largest mining companies, will start fieldwork in Mongolia with its new partner early next month.
“Over the past seven years, Erdene has conducted coal-focused, regional scale, geological mapping programs across Mongolia, with the last four years focused on southern Mongolia,” said Erdene.
“Collectively, an area of over ten million hectares was covered by Erdene’s exploration team within basins that are considered prospective for high quality thermal and metallurgical grade coal. Erdene’s comprehensive review of coal opportunities in Mongolia has included over 250 site evaluations and the drill testing of multiple targets.”
The Halifax, Nova Scotia-based firm said it has conducted “comprehensive due diligence” on numerous coal deposits and prospective licences, enabling it to create “one of the most comprehensive coal databases in Mongolia”.
As a result, it claims to have identified certain highly prospective areas and potential acquisition opportunities that will undergo further field evaluation in 2013.
Having completed a corporate restructuring, Erdene said management is now focused on advancing core projects and business interests in Mongolia, which include reviewing alternative financing opportunities to fund the advancement of the company’s mining projects.
“These opportunities include forms of partnerships at the corporate and project level. Over the past six months, Erdene has entered into non-disclosure agreements with 12 companies and discussions are ongoing with potential partners under those agreements,” said Erdene.
Mongolia’s large underexplored geologic terrains are highly prospective for hosting a range of precious metal and mineral deposits including high-quality coal, uranium, tin, tungsten, lead, zinc, rare earth and fluorite. The landlocked country’s proximity to China, its improving infrastructure and growing skilled labour force are also important factors in Mongolia’s growing profile as a favourable destination for mineral development.
The main drawback has been a lack of clarity and stability with respect to mining and foreign investment laws, said Erdene, which has 15 years’ experience operating in the country.