An eye for coal

AUSTRALIAN optical company C@ is ditching the glasses to explore coal opportunities in Mongolia and has hired mining engineer Mark Earley to lead the company in to unchartered territory.
An eye for coal An eye for coal An eye for coal An eye for coal An eye for coal

Mining in Mongolia, image courtesy of Austrade.

Staff Reporter

Earley has more than 30 years experience in both the domestic and international coal sectors, as well as a strong background in operations, project development, mine management and senior advisory roles.

Since his appointment in September last year, Earley has acquired coal licences in Mongolia.

Earley said C@ was in the process of finalising the sales and purchase agreement for eight exploration licences worth $A7.7 million from an international coal developer in the country.

“There are four licences in the South Gobi province and four at the adjoining Ovorhangay province in southern Mongolia, covering a vast area of about 625 square kilometres,” Earley said.

“We did the exploration drilling and completed the due diligence for the eight licences in 10 weeks, with tests from the drill samples confirming the presence of high-quality coking coal.”

Earley said an extensive exploration program was planned for the Ovorhangay licences, once the sales and purchase agreement had been finalised.

The program includes extensive drilling, in addition to geophysics and seismic testing.

C@ plans to have a JORC-compliant resource for Ovorhangay by the end of the first quarter next year.

C@ hoped to re-comply with the Australian Securities Exchange as a coal explorer and announce the new company name at the end of next month, Earley said.

Earley took the opportunity to fire a shot at the federal government over the Minerals Resource Rent Tax and carbon tax, saying junior mining companies looking for value had to venture outside of Australia.

“At the moment there’s been an influx of companies heading to Mongolia and the country is on the cusp of becoming a major mining centre,” he said.

“Assets in Mongolia were becoming more expensive, and the Mongolian government has actually stopped handing out new licences as it is in the processes of restructuring the country’s mining laws to stop speculation.”

Earley said a benefit of having assets in Mongolia was its close proximity to China.

“The demand is there from neighbouring China for coal, and everyone wants a foot-hole in the south of Mongolia because of the Chinese demand.”

Earley says despite the recent negative reports about the Chinese economy, “you can’t just cut off growth that quickly”

Other markets showing an interest in coal from Mongolia include Russia, South Korea and Japan.

However, Earley warned infrastructure in Mongolia at the moment was limited.

“When we head out to our tenements we take satellite phones, tents and four wheel drives with spare tyres,” he said.

The Mongolian government had acknowledged the significant growth in the mining sector and the need for infrastructure, and had announced the construction of three major rail lines, Earley said.

“The line [Stage 1] that is currently being constructed, is basically trying to pick up most of the mining provinces in Mongolia.”

Earley said Stage 1 of the rail project would benefit C@’s South Gobi project, while Phase III – called the Altai rail link – would be an advantage for Ovorhangay as it would run to the west of the province.

C@ said it hoped to start mining operations in Mongolia in 2014.

The company has also set up a partnership with Ethica Trade Cermelang for potential high-quality coal opportunities in Indonesia.