(EnergyAsia, May 9 2011, Monday) —Canada’s Prophecy Resource Corp said it has submitted a formal request to Mongolia’s Ministry of Natural Resources and Energy to build the 600MW Chandgana power plant in Khentii province in central Mongolia.

The Vancouver, British Columbia-based company said it submitted the request after investing eight months in due diligence, research and study to prepare the report. Last August, Prophecy engaged local Mongolian experts to initiate a feasibility study for the power plant based on its Chandgana coal deposit.

With assistance from Germany’s Evonik Industries, the Prophecy team completed the technical and financial analysis, including an environmental impact assessment which was approved by the Mongolian Ministry of Nature and the Environment last November. It also completed the feasibility study in  accordance with local policies for the granting of a permit to construct and operate a power plant in Mongolia.

Prophecy said it aims to supply Mongolia with cleaner and affordable energy and to eliminate expensive and growing foreign electricity import. With several antiquated Mongolian coal power plants due to be decommissioned, Prophecy said it intends to build a modern thermal power plant complex at Chandgana and connect it with the country’s existing Central and Eastern energy systems.

Prophecy said that as the project scales up to 4,200MW, there is potential to export surplus power to China, with its capital Beijing located 1,000km to the south. Prophecy has been in discussion with various investment banks interested in providing Chandgana with project financing.

Upon receiving the ministry’s endorsement, Prophecy said it plans to work with the Mongolian Energy Regulatory Authority (ERA) to obtain the permit to build the power plant.

John Lee, Prophecy’s chairman, said:

“Prophecy officers, directors and advisors have a solid track record of constructing, operating and financing large energy projects. Chandgana Power Plant represents modern industrialisation and energy independence for Mongolia, new potential energy supply to China, and further accretion of significant value for Prophecy’s shareholders.”