IVN Finds 'Massive' Mongolia Coal ResourceIvanhoe Says Finds 'Massive' Mongolia Coal Resource
Wednesday, February 09, 2005 7:10:49 AM ET
CAPE TOWN (Reuters) - Ivanhoe Mines said on Wednesday it had discovered a big new resource of coal in Mongolia adjacent to an existing open pit mine.
"We have found a massive coal resource," Executive Vice-President Mo Munshi told a mining conference in Cape Town.
He said the firm aimed to complete enough drilling in 2005 to confirm that the new site contained 100 million tonnes of coal.
Ivanhoe believes the seam of coal runs around 14 km (9 miles) from the existing Nariin Sukhait mine owned by a MAC Ltd, a Chinese-Mongolian joint venture.
The MAC mine is ramping up production from 500,000 tonnes annually to around one million tonnes at low costs of around $1 per tonne, Ivanhoe's Chief Financial Officer Peter Meredith told journalists.
Coal from the mine, not far from the Chinese border, is trucked across the frontier to supply the country's huge appetite for coal.
Ivanhoe owns 100 percent of the new coal resource, which is around 400 km (250 miles) west of the Oyu Tolgoi copper/gold project it is developing.
Meredith also said Ivanhoe was putting together an international consortium to bid on the Tavan Tolgoi coal project, which is closer to Oyu Tolgoi and could be connected by a new railway.
Tavan Tolgoi is currently owned by Mongolians who lack the capital to develop the mine, he added.
The Oyu Tolgoi project has one of the world's biggest copper and gold deposits with a resource of 11.2 billion lbs of copper and 12.4 million ounces of gold.