HONG KONG – Reuters reported that Mining firm Green Global Resources will start iron ore production in the second half of the year in Mongolia, despite disturbances caused by severe weather.
Severe winter weather in Mongolia has killed millions of animals, blocked roads and affected exploration and mining activities in some areas in the country.
Mr Joseph King newly appointed chairman of the agribusiness-turned-mining company said “We’re about two weeks behind schedule now but we are working hard to catch up. That’s important to us and we are racing against the time.
He said that “Cash flow will start to come in after production starts in the second half.”
Mr King said the company will announce after the Easter holiday a China state owned company as contract miner for the iron ore project, Golden Pogada which holds mining rights in the Oyut Ovoo property.
Green Global will change its name to North Asia Resources Holdings Ltd following a reverse takeover last year amid a raft of Mongolian mining firms flocking to Hong Kong to list.
It has invested in an iron ore mine in Dundgobi aimag, about 270 km southwest of Mongolia’s capital Ulaanbaatar, with an estimated 148,9-million tons of iron resources and 174 000 t of copper resources in the First Mine Area alone, which accounts for about 8,33% of the total mine area.
Green Global also has recently announced plans to buy two alluvial gold mines in Mongolia for CNY 35 million.
State-owned China Railway Engineering Corp will have an 8% stake in the company, and has agreed to buy at least 1,5-million tons of iron-ore per year at market prices and provide transportation services for the mine’s output of at least 2,5-million tons per year to Erenhot for 10 years with an option to renew.
King said the company will announce after the Easter holiday a China state-owned company as contract miner for the iron ore project, Golden Pagoda which holds mining rights in the Oyut Ovoo property.
China Railway is building a docking station for the project, with work to be completed in July, which will facilitate transport of the ore between Mongolia and China, he added.
Shares of Green Global started to rise last June on expectation of new investments in the mining industry and gained 84 percent to a high of HK$3,19 last October after the reverse takeover was announced in July. But they have retreated since then to close at HK$1,66 on Wednesday.