(EnergyAsia, March 7 2013, Thursday) — Citing a study that it commissioned, Australia’s Modun Resources Nuurst said its Nuurst coal mine in Mongolia could deliver as much as 84.7 million tonnes of sub-bituminous thermal coal over a 30-year operation.

The study undertaken by Brisbane’s Bluefield Group has bolstered the Australia-listed company’s confidence to develop Nuurst into a low-cost mine with an annual capacity of three million tonnes by the fourth year of operation.

The study said the mine’s production costs could be held down to an average US$13 per tonne over the 30-year life span at today’s costs. Nuusrt holds 478 million tonnes of sub-bituminous coal reserves, of which 430 million tonnes is classified as “measured and indicated”. It is located close to infrastructure, just six km from existing rail.

According to Modun, Bluefield was hired to prepare a marketable Australia-compliant coal reserve report to ascertain the viability of investing in the Nuurst project.

While Modun said it would still undertake a final report, it will use Bluefield’s findings to plan for the next stage of its studies in anticipation of it obtaining a Mongolian mining licence later this month.

The company was recently granted approval by the Mongolian Mineral Resources Council to register Nuurst’s coal resources with the country’s Mineral Resources Authority, a significant step forward in converting its exploration licence to a mining one.

Modun said the Mongolian government plans to increase the landlocked nation’s annual rail capacity to 50 million tonnes, up from the current 20 million tonnes by 2020.

Modun said it plans to start production at Nuurst within 12 to 18 months at an initial rate of three million tonnes per year, with two thirds of that going to export and the remaining third for domestic sale.