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"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Vancouver-based junior Prophecy Coal (TSE:PCY), which moved to the TSX main board last month, has landed a major deal to build a coal-fired power plant in Mongolia.
The company said yesterday its subsidiary, Eat Energy Development LLC, has received a licence from the Mongolian Energy Regulatory Authority to construct the 600-MW Chandgana power plant. It is the first thermal power plant licence to be issued by the Mongolian government.
Coal for the Chandgana mine-mouth power plant will be supplied from Prophecy’s Chandgana Tal (“Tal”) Deposit, for which the company has already obtained a mining licence. Tal contains 141 million tonnes of measured coal and is located 9 km north of Prophecy’s Chandgana Khavtgai project, a deposit with over 1 billion tonnes of measured and indicated coal, Prophecy states.
Chandgana is 60 km from Underkhann city (East Energy System), and 150 km from Baganuur city (Central Energy System). Transmission lines will link the two cities through Chandgana.
Engineering procurement and contractor selection, along with the power purchase agreement and project financing, are expected to take place in 2012. Construction is targeted to begin in the second quarter of 2013. The plant would start generating electricity in 2016.
Mongolia is heavily dependent on neighbouring Russia and China for its fuel and power needs.
Power consumption is expected to rise dramatically given the country’s focus on building and operating new mines, such as the massive Oyu Tolgoi copper-gold complex currently under construction.
