Coal Mining in Mongolia | Coal | Coal Mining

AGH University science and technology Faculty of Mining and geoengineering, Department of open pit mining

Internship report
Sharyn gol open pit thermal coal mine 18/07/2011 to 09/09/2011

Jargalan Chuluunkhuu 9/16/2011

.... 16 Xanadu Mines.................................... 14 MAK ............................................................................ 4 Coal mining in Mongolia ....................................................................................................................................................................................... Major coal mines in Mongolia ...................................................... 14 Prophecy Resource Corp................................................. 11 Technical specifications of drilling rig ......... 12 7.................... Reference (in Mongolia ).............................................................. 17 Mogoin Gol JSC............ 6.................................................................... 16 Hunnu Coal.................................... 4..................................................................................................................................................... 14 Mongolian Mining Corporation .......................................................................................................................................... 17 Baganuur JSC ........ 9 Technical aging of Sharyn Gol mine: ................................................................. 5 Coal Quality .................................. 11 Equipment's time effectiveness ........................................................................................................................................................................................................ 8 Machines and equipments ............................................ 17 Shivee Ovoo JSC .................................................... 18 Aduunchuluun JSC ..... 2............ 6 Sharyn Gol’s Customers .................................................................................................................................................. 10 Technical specifications of Electrical draglines ......................................................................................... 3.............................................................. 18 ........................................................................ 3 Translation of reference ...................................................................................................................................................................... 6 Production................................................................................................................................................................................................................................................ 5 Company overview ...................Table of Contents 1. 14 Erdenes Tavan Tolgoi ............................................................................................................................................. 8 5............................................... Mining processes of Sharyn gol mine .....

1. Reference (in Mongolia ) .

Translation of reference .2.

However. extraction costs are usually low. cost advantages and relatively easy access to large consumers like China and Russia. Mongolia’s proximity to China and Russia is another factor making its coal industry attractive. In addition to its large resources. During peak production.5mn tonnes annually. without having any infrastructure related difficulties. giving mining operations a major competitive advantage compared to peer operations in Russia. development and production stages with a combined estimated coal resource of over 150bn tonnes with varying quality from low-grade coal. dating back 46 years to first production in 1965.5mn tonnes per year and 80% of its coal supplied to Darkhan and Erdenet Thermal Power Plants (TPP). Most of them are proven but have not been developed due to a lack of infrastructure and capital to date. its production dropped to around 0. In 1995 the company was partially privatized and in 2005 it became a 100% private company. coal extraction reached 2. Due to typically low strip ratios. Coal Production (mln tons) 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 2010 2011 4. Mongolia has very good mining conditions usually suited for surface mining. The mine is one of the oldest coal mines in Mongolia. China and the rest of the world. Given its undeveloped world class resources. due to deterioration of equipment and an increased strip ratio. The country possesses over 100 coal deposits and about 300 occurrences. in recent years.lignite to high-quality bituminous coking coal. listed on the Mongolian Stock Exchange. Company overview Sharyn Gol is a Mongolian thermal coal producer with 374 million tonnes of JORC compliant resources. This railspur enables the Company to deliver coal to its customers directly via rail.3. Coal mining in Mongolia In Mongolia there are dozens of coal mines in the exploration. . Mongolia is a candidate for being one of world’s largest coal exporters to driving forces of the global economy. The Sharyn Gol mine also has a competitive advantage in that it is connected to the Trans-Mongolian railway by a dedicated railspur. common to other mining operations in Mongolia.

thickness from 15 to 30 m. width 1900 m.45 0.Sharyn Gol Mine The Sharyn Gol coal deposit is located 50km south of Darkhan city and 240km north of the capital city Ulaanbaatar.46 4000-7300 0-300mm 1240°C-1280°C 0.25 0. % Sulfur(dry basis).5mn tonnes per year in the medium term. Kcal/Kg Size Ash Melting Point Production The company is planning to increase production volume to 1mn tonne per annum in the near term and increase to 2. Sharyn gol is assuming that most of the new coal production will come from the new coal seam discovered as a result of 17. It was discovered in the 1930’s and initially explored by a joint venture of Mongolia and Russia efforts in the 1940s and 50’s.55 1.90 1.55 0.55 0.000 meters drilling in 2010.55 0. angle of dip 8 12 .55 0.70 1. The following is our Sharyn Gol production assumption by coal seams: Production breakdown.% Calorific value. overburden thickness 140~200 m.00 1. The Sharyn Gol coal mining license area covers 16.4 19 33-35 0.% Volatile Matter(dry basis). Coal seam length 1000m.05 0.55 0.060 hectares.55 Total Coal production 2005-2010: .50 1. mn tonnes From old coal seam From new coal seam 2011 2012 2013 2014 2015 14. Coal Quality Total moisture.% Ash (dry basis).

4 13. US$/t Overburden removing Coal Mining Processing (CHP) Wash Plant Site Infrastructure Transport cost Total Direct Cash Operating Costs Total Direct Cash Operating Costs (real) 2011 2012 2013 2014 2015 10.2 0.6 38.8 49.3 0.8 43.71 2005 0.42 2009 0.6 1.4 1.2 1.4 1.5 .26 7.0 0.16 8.2 14.5 8.9 8.3 35.2 0.0 42.1 37.6 34.3 9.81 9.51 2006 0.7 0.3 0.54 2007 0.Sharyn Gol Production (mln tons) Mongolia Sharyn Gol 16.6 8.5 39.4 1.9 0.0 0.69 8.45 2010 Coal production vs Overburden removing (by thousand m3) 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 1965-1980 1981-1990 Coal production 1991-2000 Overburden removing 2001-2009 Sharyn Gol’s production cost is approximately US$15 per tonne.8 2. The following figure shows breakdown of cash cost: Direct Operating Costs.7 2.5 24.1 52.1 2.55 2008 0.89 0.9 14.8 0.3 0.1 0.6 29.5 1.8 43.

No washing or other beneficiation processes are presently undertaken. then classified into lump and fines hoppers. where upon it is loaded onto waiting rail wagons. Coal is crushed to 300 mm or less. Jaw Crusher SMD-60A and Screen GISL-72 productivity 360tn/hour .Sharyn Gol’s Customers Sharyn Gol heating Erel Cement 2% Erdenet Copper 4% Mine 11% Others 4% Darkhan Power Plant 36% Erdenet Power Plant 43% 5. Mining processes of Sharyn gol mine Dewatering Drilling Blasting Overburde n removing Coal exploitation Transporting coal • by Receiving dra glin Loadin onto e rail wagons Receiving bunker capacity 180tn Crushing Classifying Simpleprocess.

6. Machines and equipments Machines and Equipments Model Task Quantity Excavators Drilling rigs Dumptracks Bulldozers Grader Locomotive Electric dragline ЭШ1-10/70 Electric dragline ЭШ-6/45 Electric face shovel ЭКГ2-8И Electric face shovel ЭКГ-4У Electric face shovel ЭКГ-5А Hydraulic excavator Hyundai LC-290 Hydraulic excavator Hyundai LC-450 СБР-160 3СБШ3-200 5СБШ-200 CAT-769D TEREX-3307 БелАЗ-548 Komatsu D155A CAT-16G ТЭМ-2 Overburden removing Overburden removing Overburden removing Mining coal and Overburden removing Overburden removing Engineering work Engineering work Coal drilling Overburden drilling Overburden drilling Transporting mass Transporting mass Transporting mass Road and dump Road Shunting 2 1 1 3 2 1 1 2 2 1 5 3 2 2 1 2 1 2 Walking excavator (Экскаватор Шагающий) Dredge career caterpillar (Экскаватор Карьерный Гусеничный) 3 Roller cone drill machine (Станок Буровой Шарошечный) .In 2008 put into production 700m of Conveyor system for coal transportation.

Technical aging of Sharyn Gol mine: Excavator aging by year 32 26 21 16 22 21 21 22 30 Drilling rig aging by year 17 14 4 2 Drill СБР160 №29 Drill 3СБШ-200 №31 Drill 3СБШ-200 №32 Drill 5СБШ-200 №36 Truck aging by year 13 13 10 10 6 6 Cat №18 Cat №20 Cat №34 Cat №35 Terex №24 Terex №25 .

m Maximum unloading height. f: 6-14 3-6 . m3/h Maximum range of digging and unloading.m Average pressure on soil.5 35 688 Technical specifications of drilling rig Drilling rig 3СБШ-200 Drilling rig СБР-160 Rock strength .5 27. m/s Theoretical productivity. t 6 45 58.133 557 43.7 153. m Maximum digging depth.055 686 66. m Operating mass. m3 Boom length.8 0. kPa When operating During walking Travel speed.Technical specifications of Electrical draglines Electric dragline ЭШ-6/45 Electric dragline ЭШ-10/70 Bucket capacity.5 107.9 0.5 22 19.5 278 10 70 95.

deg Feed force. 22. 30 0-80 0. mm Drilling depth.Operating weight. 15. k m/h Total power. kW Dimensions (working position). 7. pcs Rod length.75 386 12100х 5400x17320 17500х 5400x5300 29 160 24 3 8 0. 15.5. m Angle of blast hole incline. 30 300 0. Protodyakonov scale. Equipment's time effectiveness in accordance with operation 15% out of spare parts 0% Excavators technical damage 28% productive 38% estimated waiting 19% out of spare parts 5% Trucks in accordance with operation 2% technical damage 38% productive 46% estimated waiting 9% . mm 62 200 60 0. mm Dimensions ( transport position).9 184 7495х4900х12993 12640х4800х4698 Drilling rig 3СБШ-200 crawler mounted drilling machines are designed for roller bit drilling of vertical and inclined blast holes . Preferably the drill is used for drilling rocks with hardness of 6-14 units according to Prof. t Diameter of hole. m: Number of rods.5. kN Travel speed.

V 6000 6000/3000 6000 Operating mass.1 Line–fed motor power kW 250 520 520 Travel speed.2 4 8 Maximum digging radius. m 14. m 6.4 Maximum digging height.5 Maximum dumping radius.3 22. km/hour 0.52 6.70 18. . m 10.Electric face shovel ЭКГ-5А Electric face shovel ЭКГ-4У Electric face shovel ЭКГ-8И Dipper capacity. m3 5. The mining shovel is intended for operation in temperate climate. t 196 369 325 EKG mining shovels are designed for excavating and loading of minerals and overburden into conveyance means during open-pit operations as well as for stacking and loading operations at storage facilities and for continuous flow process technology operations.42-0.7 17.55 0.45 0. m 12.14 16.42 Voltage. Working temperature range from -40С to +45С.5 23.3 Maximum dumping height.65 22.16 13.

and EBRD own 44. MAK produces 500ktpa from the Eldev deposit which has 30m tonnes of reserve and supplies to domestic buyers – Erdenet Mining Corp.9m tonnes of measured and indicated resources. 8.8% for all seams. Naryn Sukhait and Qinhua-МАК-Naryn Sukhait JV – and.3%. and the free float is 22.900kcal/kg and coking coal with 6.500-7. Installed capacity is 3mtpa and plans to increase it to 5-8mtpa after the completion of the railway to connect with the border crossing that is being built by MAK. MMC has a license to build rail road and plans to build a 240km rail road from the deposit to the Chinese border in 2011-2012. low cost. holds mining licenses in the Aduunchuluun deposit. It has good quality thermal coal with 4. The coal has low sulfur content of less than 0. to centralize benefits of the Tavan Tolgoi mine and transfer them to the state budget. MAK commenced the operation at the deposit in Dec 2007 and begun exports in May 2008. the Company completed its IPO on the Hong Kong Stock Exchange selling a 20% offering of new shares and raised $650m. one of the largest business groups in Mongolia.0-34. low ash content of 10 to 33. Casafina/Ancora.800kcal/kg. Major coal mines in Mongolia Erdenes Tavan Tolgoi Erdenes Tavan Tolgoi LLC incorporated as an associated company of the Erdenes MGL LLC. proximity to key end market in China. also. 6.3%. The Eldev coal deposit is located 330km south of Ulaanbaatar and 21km from the Trans-Mongolian railway. 4. Russia. 11. and to collect investments for building extraction and processing factories based on the deposit and for developing infrastructure. MMC is finalizing the construction of a paved road to transport its coal to China and the initial 5mtpa coal washing plant of a planned 15mtpa (3x5mtpa) and a 18MW power plant.5% and content of volatile matter 22.7. Petrovis. has three coal mining operations – Eldev. MAK MAK. In September 2010.500kcal/kg. Combination of high quality. In 2002.1%.500-7. Khutul Cement-Limestone Plant.9% and 3. Shunklai. The company's functions are to carry out exploration and exploitation on the strategically important Tavan Tolgoi coal mine by holding special licenses. MAK launched a JV with Qinhua Corp of China in the Naryn Sukhait deposit. etc. Japan and Korea and experienced management team with strong international partners is giving the mine the best-in-class coal opportunity from Mongolia in our view. MMC commenced mining at the Ukhaa Khudag in April 2009. . The Naryn Sukhait deposit is located 50km north of the Chinese border in the South Gobi and its geological reserve is 220m tonnes of coking coal with 6. MCS Holding. where the majority of reserves and resources are hard coking coal. respectively.4%.2%.1%.960ha mining license on Ukhaa Khudag deposit in 6. moisture 8. MMC produced about 4mt in 2010 and plans to increase to 15mt by 2013.4b tonnes Tavan Tolgoi Coking Coal complex in the South Gobi of Mongolia.1%.0%. Kerry.4bn tonnes of coking and thermal coal. The deposit holds 286m tonnes of JORC-compliant proven and probable reserves and 499. Mongolian Mining Corporation MMC owns a 2. The Tavan Tolgoi deposit is the biggest undeveloped coking coal deposit in the world with 6.

1m. the Company has six .5mtpa from the deposit. the Company agreed to buy 19.and started coal exports in April 2003. 70% of the company is held by the public and 18% by Lo Lin Shing. In Oct 2010.0% and 13. MEC conducted a drilling programme at the deposit in 2007 and discovered JORC compliant resources of 149m tonnes of coking coal.5/t to the local market due to the state-regulated sale prices and is exporting at around $25-35/t. MEC’s main asset is Khushuut Coal Mine. In the first 9 months of 2010. The Ovoot Tolgoi deposit is next to MAK’s Naryn Sukhait deposit and 40km from the Chinese border.9% of Aspire Mining for A$20. Mongolia Energy Corporation MEC acquired several projects or licenses for coal. MEC has been constructing a paved road to the Chinese border which was planned to cost RMB866m and expected to be complete by the end of 2010.212kcal/kg.500-7. In 2010. and to build a dry ash separation plant which will cost $45m by the end-2011. MEC contracted Leighton Asia for a A$273m 6-year contract to develop and operate the Khushuut mine. the Company started selling coal to China. 3mtpa will be produced from the mine and production will increase further to 5-6mtpa. SouthGobi is planning to build a 45km paved road to the border expected to cost $48m by 2012. Aspire Mining Aspire Mining has three coal projects in Northern Mongolia – Ovoot Coking Coal project. the Soumber Deposit and the Ovoot Tolgoi Underground Deposit. In 2010. which is located in Khovd Aimag (Province) of Mongolia.3%. 12. In June 2010. ferrous and non-ferrous metal resources in Western Mongolia since 2007. MAK exploited a historical record 5. below the targeted 4m tonnes in 2010. The company sells its coal to dealer companies which further sell to China. Although in Gansu and Inner Mongolia coking coal prices are around $100/t. most of it went to China. and sold at an average $39 per tonne.5% moisture. the company is still selling the coal at $6.Ovoot Tolgoi Mine (producing) and two development projects.7%. In January 2010.11% by other directors.4b tonnes Tavan Tolgoi Coking Coal deposit in South Gobi of Mongolia. Initially. Tavan Tolgoi JSC Tavan Tolgoi JSC has two coal mining licenses within basin of 6. Simon. covering 169 hectares with a total resource of 40mn tonnes of coking coal with a calorific value of 6. The South Gobi provincial government owns 51% of the Company and the rest is privately held by retail investors on the MSE.1m tonnes.500kcal/kg.6m tonnes of coking coal through years 2010 to 2020. The JV has been exporting 1. respectively and the free float is 29. 20% ash and 8. The mining commenced in July 2010 and the initial production was expected by the end-2010. Ivanhoe Mines and China Investment Corp own 57. SouthGobi commenced production in April 2008 and exporting it to China. The Ovoot Tolgoi’s open cut mine proven and probable reserves are 114m tonnes and open cut and underground total measured and indicated resources are 260m tonnes of high-volatile B to A bituminous with over 7. it exploited 5mn tonnes.4m tonnes. From 2004. MEC entered a long term coal supply agreement with Baosteel Bayi in China for supplying at least 9.0% by Liu Cheng Lin. In the Ovoot project. it produced 1. and 0. Nuramt Coal project and Jilchilibag Coal project. SouthGobi Resources SouthGobi owns three coal projects in Mongolia .

in the fully diluted basis. The Khar Tarvaga deposit with a JORC compliant resources of 327m tonnes (172m tonnes are Indicated and 155m tonnes are Inferred) is located 200km south east of Ulaanbaatar and 30km from the Trans-Mongolian railway. The Company has other coal. Xanadu works to covert the exploration license on the deposit to a mining license and discussing with several groups interested in exploiting the potential of the Khar Tarvaga. has 209m tonnes measured and indicated coal resources (proven and probable reserves are 20m tonnes) (NI 43-101) with a 5. 11. Bikibi Atoll Investments and Farrington Corporate Securities respectively owning 16. The Chandgana deposit with 1.9%. and the Company targets production by 2012.0% of the Company. In January 2011.4b tonnes measured and indicated resources.211m tonnes of measured & indicated resources with the calorific value of 4. The Company targets to produce 0. The exploration will continue at the deposit this year.6m tonnes (measured 158.8m tonnes in 2011 and to reach 2m in 2013. 8.9% and 5. Xanadu completed its IPO on the ASX in December 2010. Eagle Securities.424kcal/kg.5m) and targeted JORC compliant resources of 175-225m tonnes is located 285km south east of Ulaanbaatar and 65km from the Trans-Mongolian railway. The Galshar project with non-JORC compliant resources of 203. As a mining permission was granted for Ulaan-Ovoo in Nov 2010.1% and 27.354kcal/kg is located 290km east of Ulaanbaatar and 160km from the existing railway.6% is held by other shareholders.1m and indicated 72. The most feasible coal transportation option is to build a 552km railroad from the deposit to Erdenet City of Mongolia.201-6. One possible option is to implement a coal to liquid project. Xanadu Mines Xanadu’s major coal projects in Mongolia are Khar Tarvaga and Galshar. From the drilling data of 2005-2010.204 kcal/kg calorific value. the Company started supplying coal to Erdenet and Darkhan cities’ power plants through a contract mining with Leighton Engineering. It is actively negotiating off take agreements with Russian power plants as well as prospective Asian customers at the Russian east seaports. Prophecy Resource Corp Prophecy has two thermal coal projects in Mongolia – Ulaan-Ovoo and Chandgana – totaling 1. Xanadu commenced the scoping study on the deposit. The largest shareholders of the Company are Straits Energy Trading Pte. . Only 10% of the deposit area is explored and the Company expects the resource base to be increased after 2011 drilling. Mongolian Vendors 14.0%. gold and copper exploration licenses in Mongolia. Institutional and insiders investors hold 35% of the Company.7%. the coal quality of these two deposits ranges 4. located in northern Mongolia 10 km from the Russian border and 120 km from both Mongolian and Russian rail links. The Company’s directors own 38% of the Company. SouthGobi Resources 19. The Company researches to build a 600MW mine mouth power plant with extension to eventual 4.exploration licenses covering a total area of 509 square km and announced JORC compliant measured and indicated resources of 276m tonnes of coking coal in October 2010.200MW. The Ulaan-Ovoo. The other two projects are also being explored.

9% ash and 32.0mn. Shivee Ovoo JSC Shivee Ovoo supplies 25% of Mongolian domestic coal demand. 0.500kcal/kg.54% to 39.Hunnu Coal Hunnu Coal establish as a premium coal company focused on exploration and development of its interest in coking and thermal coal deposits in Mongolia. Baganuur JSC is included in the 2011-2012 privatization plan.5) per tonne in 2010. holding over 14%. the company produces 1. the rest is free float.01% ash.11) per tonne in 2010. Baganuur JSC Baganuur supplies over 50% of the coal consumption of the Mongolian Central Energy System. 24% of Baganuur will be sold to the public by the offering of additional shares. with a focus on infrastructure and access to the Chinese export coal markets. The State owns 75% of the company and the biggest private shareholder is Firebird investment fund. Baganuur has been operating with operational losses. Shivee Ovoo has been operating with operational losses. However.407kcal/kg calorific value.190 ($14.293ha and is located 260km southeast of Ulaanbaatar and connected with the Trans-Mongolian rail line. Coal contents are 2. The Baganuur coal deposit. 80% of Shivee Ovoo coal production is supplied to TPP-4. Tsant Uul has 90.200-3.9% moisture. the Parliament of Mongolia established a cooperation contract with the Chinese government to build a 4800MW thermal power plant relying on the Shivee Ovoo coal deposit.784 kcal/kg dry ash free (daf). Since its inception in 1978.5% sulphur and 43% volatile material. 40% ash content. however. In 2010. Due to the plan. 17. The Mongolian Government plans to build TPP-5 in Ulaanbaatar based on Baganuur coal by 2016. Currently the mine extracts 3mtpa due to central-region demand. their all venture agreement projects has JORC resource of over 400.4mtpa. 564mt is economic reserve. Because of regulated low coal price. covers 4. through a number of joint venture agreements in the premier coking coal basins of southern and eastern Mongolia. because of state regulated coal price. At the current stage. Hunnu Coal has positioned itself. the Company extracted over 80m tonnes from the deposit. The initial estimated economic reserve was 304m tonnes and resource was 296m tonnes with a calorific value of 3. 12.5% of moisture. The Mongolian Government owns 90% of the Company and 9. a strategic deposit. Designed production capacity of the company is 2mtpa. is located 139km east of Ulaanbaatar and connected with the city through a railway.1bn.008 to 7.958 ($11. Unst Khudag has JORC resource of 324. MNT13.963-4. MNT18.0% is held by Firebird Fund. Out of the explored reserve.455 kcal/kg. . approved by the parliament of Mongolia in early 2010. a strategically important deposit. old equipment and financial constraints. the biggest thermal power plant in Mongolia.25mn tonnes of thermal coal with an average calorific value of 6. The deposit’s strip ratio is reaching 6:1. their major projects are Unst Khudag (Hunnu coal owns 80% of the project) and Tsant Uul (90-80% in hand of Hunnu). The deposit. 8. Total explored reserve is 600mt of brown coal and expected resource is 2.0nm tonnes of coking coal with an average calorific value of 7.

In later years. The deposit covers an area of 89 hectares.3% ash and 0.2007. Mogoin Gol’s average strip ratio is about 5-7. the scope of operations was expanded and capacity increased to 600ktpa. a centre of the Dornod province. increasing to 200.7% moisture. Aduunchuluun deposit is located in 5km from Choibalsan city. 880km northwestern from UB city and 209km western from Khuvsgul province center.6 per tonne. Currently. 9. Mogoin Gol coal deposit is located in Tsetserleg soum of Khuvsgul aimag. the company has 74 employees. In 1983. 7. Aduunchuluun JSC The Company was established with underground mining operations in 1954 to supply the Eastern Mongolia Region and Choibalsan city with coal. of which 3.9% ash content. 1% sulphur and 45. 38.8% volatile matter.9% moisture. 1989 and 1995 production capacity had been expanded by investing new mining equipments and machines. In 1995.8mt respectively with gross calorific value of 3.000 tonnes of coal production per annum. the Company has been producing 300ktpa and selling coal at $6.203Kcal/kg. . The Company plans to increase its production to 1.Mogoin Gol JSC Mogoin Gol mine was established in 1970. In 1979. and it is able to export the coal to Russia and China. The total proven reserves and resources of brown coal are 241.5-2mtpa as Dornod Power Plant’s coal demand is expected to increase significantly in the coming years. Then the state owned 51% was transferred to provincial government ownership. and now mainly supplies coal to centers of Khuvsgul and Zavkhan provinces and eastern soums of Zavkhan province. Total resource is 11. The deposit is connected with Russia through railway.6mn tonnes are viable to mine by open pit mining.3mt and 423. the company was partially privatized.2mn tonnes of coal with 5.100kcal/kg of calorific value. floating 49% of the company on the MSE. 650 km east of Ulaanbaatar and 100 km from the Mongolian-Chinese border.

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