Toronto listed South Gobi Resources has increased its Mongolian coal interests by paying AUD 20 million for a 19.9% share of Australia listed Aspire Mining. Aspire owns the Ovoot coking coal project in northern Mongolia near the Russian border. A drilling program is planned to ascertain the size of the coal resource at the site.
South Gobi already owns the Ovoot Tolgoi mine from which it is producing coking coal and selling to customers in China. South Gobi plans to extend its market to customers elsewhere in Asia. Earlier in December, South Gobi signed a series of new supply deals with China-focused companies. One deal involves selling 450,000 tonne to North Asia Energy Group and the other agreement is to supply 500,000 tonne to an unnamed international company.
Both deals were for supply in 2011. An agreement was struck two days earlier with Hong Kong listed Winsway to supply 3.2 million tonne of coking coal next year. South Gobi began mining in Mongolia in 2008 and sold 1.3 million tonne last year. The company said it is on track to sell around 2.5 million tonne in 2010. Included in South Gobi’s portfolio is the Ovoot Tolgoi mine and the vast majority of sales are made to China. Ovoot Tolgoi is 40 kilometers from the China Mongolia border. The company is owned by Toronto and New York listed Ivanhoe Mines and produces thermal and coking coal at Ovoot Tolgoi.