Aspire Mining eyes lucrative Chinese market with updated coal reserves at Ovoot project in Mongolia
Aspire Mining’s (ASX: AKM) aim to become a supplier of coking coal to China has been boosted by the release of updated coal resource and reserve estimates for its Ovoot project in Mongolia.
The Ovoot development is based on extracting highly-sought “fat” coking coal from the project in the country’s northwest and transporting it by rail to China.
The term “fat” refers to coking coal that falls within the highest classification category available.
World-class status
Leading consultancy firm SRK has confirmed the world-class status needed to support the financing strategy in the most detailed and comprehensive review of Ovoot conducted so far.
The independent study estimated a total coal resource of 219.4 million tonnes including 99.5Mt measured, 100.9Mt indicated, and 19.0Mt inferred.
It also provided an estimate for a total coal reserve of 130.1Mt, based on an assumed run-of-mine (ROM) moisture basis of 2.9% as received, comprising 76.8Mt proved and 53.3Mt probable.
Life-of-mine plan
SRK also provided a conservative life-of-mine (LOM) plan upon which the coal reserve estimate was based, including an overall LOM of 31 years following the commencement of production at up to 5Mtpa ROM coal mining and processing.
Highlights from an underlying project cost model showed the project could be developed on a low initial capital cost basis, with payback achievable within three years of production.
The SRK study only included coal from the upper seam—the lower seam and coal deeper than 350 metres were excluded, with the potential for future extraction by underground mining methods.
Positive market study
A market study conducted earlier this year provided further confirmation of the project’s prospects, with coal from Ovoot classified as FM36 metabituminous, a high-quality and sought-after product used in coke production.
The study also identified the Chinese provinces of Hebei, Inner Mongolia, Liaoning, Heilongjiang and Jilin as prospective target markets.
The comprehensive marketing study conducted by Fenwei Digital Information Technology found that within these provinces, there is considerable demand for fat coking coal with Ovoot coal’s characteristics.
Regional shortfall
In 2023, there was a washed fat coking coal supply shortfall in these regions of 15.1Mt, which is forecast to grow to 18.1Mt by 2029.
The study suggested that coal prices would remain strong for the foreseeable future, driven by robust market dynamics and consistent demand for high-quality coking coal.
The Fenwei market study has forecast an average price of up to $376 per tonne for Ovoot coal in 2025—significantly higher than the $231/t price assumed in a 2019 pre-feasibility study, offering strongly positive implications for the project’s underlying economics.