Projects

Khushuut Coal Mine

The Khushuut coal mine is situated in the Khovd Province of western Mongolia. Owned by Mongolia Energy Corporation (M

Producer
Coal
Location
Khovd Province, Western Mongolia
Ownership
Mongolia Energy Corporation
Operator
Leighton Asia
Annual production
3Mt in the first year
Mine life
19 years
Mine method
Open-pit
Geology
Middle Permian-age Khushuut formation

The Khushuut coal mine is situated in the Khovd Province of western Mongolia. Owned by Mongolia Energy Corporation (MEC), the mine is spread over 600ha. The total cost of developing the mine is estimated at $202m for the first two years. Mining commenced in July 2010.

In November 2009, MEC contracted Leighton Asia, a subsidiary of Leighton Holdings, to carry out pre-mining work on the mine. As part of the contract, Leighton conducted a 3mtpa mine plan study.

In January 2010, MEC signed a ten-year contract with Baosteel Group Xinjiang Bayi Iron and Steel (Baosteel Bayi) to supply coking coal. The contract includes an option to buy future productions.

In June 2010, MEC awarded a six-year, $232m contract to Leighton to develop and operate the mine. Leighton carries out all mining activities including planning, drilling, transport and handling of coal.

“The Khushuut coal mine is situated in the Khovd Province of western Mongolia.”

Exploration work was carried out by the China National Administration of Coal Geology. About 52,000m of drilling was conducted as part of the exploration under the supervision of John T Boyd Company. MEC contracted Fenwei Energy Group to carry out field investigations, feasibility and market studies and an environmental impact assessment of the mine. The company is planning to conduct further exploration to measure additional coal reserves.

Reserves

Initial exploration in 2007 revealed that about 156.2ha of the mine area contained 460mt of coal reserves. About 181mt of these reserves is premium coking coal. Further analysis revealed that the mine has about 149mt of joint ore reserves committee compliant resources.

The reserves contained in the field are of high-quality Jiaomei coal. This type of coal contains low ash and sulphur content and also lower amount of volatile matter. The coal has a relatively high caking index and lower plasticity index. Some of the other coal reserves found in the mine have been classified as Shoumei and Pinshoumei.

Geology

The coal reserves of the mine are deposited in the middle Permian-age Khushuut formation. The formation is more than 700m thick and contains composites of sandstone, siltstone and other conglomerates. It contains two pairs of north-south synclinal folds.

Exploration of the mine identified 29 coal seams of varying thickness in a steeply dipping deposit. The majority of the seams are B-seam and C-seam. The characteristics of the seam indicate that the coal was deposited in a restricted inter-mountain basin occurring due to rapid changes in depositional environment.

Production

MEC commenced trial production with the first ore shipped in October 2010. The company is planning to produce about 3Mt of coal in the first year by the end of 2011. It intends to expand the capacity to more than 5Mt in the future.

A total of 5,300t of raw coking coal was produced at the mine between October 2010 and March 2011.

Open-pit mining

“The total cost of developing the mine is estimated at $202m for the first two years.”

The Khushuut coal mine uses the open-pit method. The method was chosen due to the geology of the reserve and the need to operate multiple pits. Diesel-powered hydraulic excavators are being used.

Track dozers are used for material movement and overburden dump maintenance. Front-end loaders are used for pit clean-up and coal loading.

Ore processing

MEC It is planning to construct a 1,100t/h coal preparation plant worth $60m to process raw coal. The $60m plant will produce coking coal, middling and rejects. It will be operational by the third year of operation. Until the plant is constructed, the coal will be processed using a dry screening process.

A boiler house, portable water treatment plant and full rest room facilities were constructed at the mine site. An on-site laboratory was built for quality control purposes. A power plant is in the planning stages.

Transport

MEC is constructing a 310km asphalt-paved road to link the Khushuut mine with Takeshenken on the Mongolia-China border. The road will be used to transport coal across the border. Construction of the road was started in 2008 and about 304km has been built and 295km paved up to mid-2011. A 6km section connecting the mine to the Yarant border will be constructed upon receiving permission from the Mongolian Government. The company is investing $196m in the project.

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