(EnergyAsia, June 20, Friday) — Canada-based Red Hill Energy Inc said it has engaged Australia-based consulting and engineering firm Minarco-MineConsult (MMC) to prepare a comprehensive pre-feasibility study on its fully-owned Ulaan Ovoo coal project in northern Mongolia.

The study will complement earlier analysis produced by US-based Behre Dolbear Inc’s scoping study and several transportation and economic studies prepared by a Mongolia university.

The company said the pre-feasibility study will significantly extend the earlier studies on geology and reserves, market analysis, mining engineering, transportation and infrastructure, hydrology, economic analysis, environment including labour and community relations. 

The study will prepare detailed mine plans for each year of operation and will expedite Red Hill’s production plans at Ulaan Ovoo. The study will rely on MMC’s experience with using latest mining technology to determine the most profitable mining and transportation scenarios.

It will consider all aspects of delivering the coal from the ground to East Asian markets and will include an extensive section on rail transport and costs that will expand transportation studies begun last year.

MMC’s team of professional geoscientists and engineers, several of whom have extensive prior experience in Mongolia and China, will perform the study. It will be prepared in compliance with NI 43-101 requirements and will have a designated Qualified Person as its principal signatory. The final pre-feasibility study is anticipated within four months.

Red Hill Energy’s president, Ranjeet Sundher, said: 

“We are pleased to have a firm as qualified and regionally experienced as Minarco to work with. The completion of this extensive study will go a long way towards our production and partnership goals. Ulaan Ovoo’s size, product quality, proximity to rail and major world markets as well as its abundant water source and anticipated ease of mining bodes well for the viability of the project.”

Redhill believes Ulaan Ovoo contains 208.8 million tonnes of high quality thermal coal with an additional 35.9 million tonnes inferred. The project has been granted a 30-year mining licence by the Mongolian government with a 40-year extension option. 

The mine is situated 17 km south of the Russian/Mongolian border and is located near the railroads, which offer transportation options to the world’s three largest coal importing markets including Japan, Taiwan and South Korea.
These markets are accessible through Russia’s massive coal exporting centres, Vladivostok or Vanino.

Ulaan Ovoo’s coal quality is desired in these markets due to its low ash, low sulphur, low nitrogen, high volatile matter and its high calorific value averaging 5,092 kcal per kg or 9,165 BTU per lb.

It is carried primarily in a single, near surface coal seam averaging approximately 60 meters in thickness. The stripping ratio on the first 120 million tonnes of Ulaan Ovoo coal averages less than 1.4:1, which at six million tonne annual production would support a 20-year mine life. Seven exploration licences, all fully controlled by Red Hill Energy, are in adjacent and/or surrounding basins and may lead to a significant increase to the resource base. 

Minarco-MineConsult, part of the Runge Group, is a premier international consulting and engineering firm, with specialist expertise in mining engineering, geology, and environmental economics. Their main office is located in Sydney, Australia, with satellite offices in Beijing and Jakarta. MMC’s core business is technical mine planning with particular expertise in coal mining.
Red Hill Energy Inc said is advancing over one billion tonnes of 100% owned coal from two Mongolian coal basins towards production.  Red Hill also has multiple uranium properties and several gold and copper exploration projects located throughout Mongolia.