Wednesday, March 10, 2010

Mongolia Energy to deliver first coal to Bayi Steel

Hong Kong-listed Mongolia Energy Corp will deliver its first coking coal shipment this August.The company's Khushuut project in western Mongolia will supply quality coal to China's steel industry in Xinjiang Province, with Bayi Steel, a unit of China's largest steelmaker Baosteel Group, as its first customer.

Khushuut is an open-pit mine in Khovd province and MEC has appointed Leighton Holdings as its contractor. The company has also been building a 340 km road linking the Khushuut mining area to the Mongolia-China border, which is about 550 km to Urumqi, the provincial capital of Xinjiang.

MEC aims to sell its coking coal at an FOB price of $120/t versus a production cost of about $35/t. Including transportation, its coal may sell at roughly $165/t.

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