The company said 22,000 tonnes were sold to Energy LLC, registered in the Buryatia Republic of the Russian Federation, for power station and boiler consumption.

Stockpile coal at the Sukhbataar rail station will be loaded and railed by Naushki during the next 60 days, officials said. The deal follows a trial shipment the firm took from Prophecy in June.

Two Mongolian companies and two Mongolian government power plants local to Ulaan Ovoo make up the other four coal purchases. They have committed to buy at least 70,000t for delivery this year.

Prophecy said it would meet the commitments by depleting its stockpile while continuing operations.

“Ulaan Ovoo's clean coal with its low ash (8%) and sulfur (0.5%) is highly desired,” chairman and chief executive officer John Lee said.

“We are making steady and solid progress to establish Ulaan Ovoo as a recognized coal supplier in local and international markets.”

Earlier this month Prophecy Coal announced it had intercepted a 19-meter thick coal seam at its newly-acquired Ilch Khujirt property, also in Mongolia.

The discovery was made just 17 kilometers northeast of Ulaan Ovoo.

The 4773-hectare Ilch property is contiguous to Prophecy’s existing exploration licence, which extends 7392 acres.

Prophecy has the right to acquire 100% ownership of the Ilch property for $US2 million within the first year, or $US4 million in the second year once an agreement is signed.

“We believe through systematic exploration, there exists great potential to discover additional coal seams of minable depths in the surroundings of Ulaan Ovoo mine,” Lee said at the time.

Prophecy Coal has more than 1.4 billion tonnes of surface minable thermal coal resources on two coal properties in Mongolia. Ulaan Ovoo is in production and the Chandgana mine mouth power plant is currently being permitted.