RE: RE: SouthGobi Signs Cooperation Agreement With "Infrastructure support - CHALCO will assist SouthGobi to procure electricity for its Mongolian business operations either through a direct connection to grid power, or through development of a conveniently located power plant. "
Per these comments, there is no connection to Chandgana and PCY's power plant. I would have to double check, but we are looking at separate grids. At the very least, opposite sides of Mongolia. What is interesting, imo, is the structure of the deal embarked upon.
PCY has indicated Ulaan Ovoo as a possibility to raise funds to assist in the financing of the power plant. The deal CHALCO cut with SouthGolbi on their part, is best described as vertical integration (ie: sourcing future coal needs via ownership of the supply chain).
Something along these lines makes some sense where Ulaan Ovoo is concerned imo. Selling UO outright I do not think is an option nor something I would like to see. Bringing in a JV Partner for cash that also includes a multi-year off-take agreement, however, is more preferred and more likely imo.
Eastern Seaports aside, the most likely suiters would be Energy LLC and local power plants in the Republic of Buryatia in Russia. PCY has indicated interested parties per some type of involvement with Ulaan Ovoo and the only party (parties) that have stepped forward in a very active role are the Buryat power stations and boiler operators. Given total amounts needed to be raised, however, it looks as though monies raised would fall short of total monies needed. Nonetheless, Ulaan Ovoo needs a shot in the arm. Like before, however, that key looks to be opening the Zeltura border post.
Per the June 29, 2011 PR:
To further facilitate trade between Mongolia's Selenge province and Russia's Buryatia province, Prophecy is collaborating with a number of government and private entities towards opening of the Zeltura border post, which is 15 km from the Ulaan Ovoo mine. The opening of Zeltura would enable Prophecy to sell Ulaan Ovoo coal at mine gate to Russian industrial consumers and translate into significant transportation savings for Prophecy.