This review provided recommendations to develop and implement an alternative supply chain to provide additional capacity for haulage and processing of coal to ensure end user consistent and timely delivery of hard coking coal to Chinese end users.

These actions are being implemented to optimise the “pit to end user” supply chain with a number of significant milestones achieved, TerraCom said.

In addition to the existing supply chain providers, agreement has been reached with new haulage contractors, import agents and coal processing facilities to enable a forecast first coal delivery within April from the new supply chain.

During February 2016 a slowdown of site operations for the Tsaagan Sar traditional holiday period without incident, according to TerraCom.

“Operations ceased on 4th February and all employees and contractors, outside of a minimal site maintenance and coal export crew, were demobilized safely from BNU,” it said.

“The slowdown continued during March while an alternative supply chain was established. The current on site crew have maintained the operation ready for recommencement of mining and have delivered 32,348 tonnes of raw coal from BNU to the Ceke Border using the new haulage contractor.”

The focus at BNU during this slowdown period has been to remove fixed costs out of the business and reduce the mine site stockpile to target levels.

The continued downward pressure on the internal Chinese hard coking coal market has also seen enduser sales prices drop.

“Although, due to the high quality of BNU coking coal, the Terra Energy team has been able to fully mitigate this price drop with an agreed coal specification adjustment with our final end user,” it said.

“The highly disciplined and structured mine planning and coal quality control process has ensured the demand for BNU Coal remains strong, evidenced by the considerably smaller price fall when compared to the seaborne market.”