Mongolian coal mine resumes operations
Suspended since July 2012, the Ulaan Ovoo thermal coal project in north-eastern Mongolia is up and running again.
Prophecy Coal (TSX:PCY), the Canadian company that owns the mine, announced on Friday that it has re-hired all the required staff and that with a fleet of excavators and dump trucks, production should reach up to 50,000 tonnes per month until the end of the year.
The $55 million project was temporarily suspended last year because the stockpile of coal at the time was enough to meet the company's contractual obligations for the year. Following the suspension, the company said it was in active discussions with potential customers to increase sales.
Earlier this month, the company announced a sales contract with a new customer for 30,000 tonnes of coal. The first shipment is planned for November.
Ulan Ovoo is located 17km from the Russian border and 120km from Mongolian and Russian rail links. Customers include both Russian and Mongolian companies, as well as the Mongolian government-owned power plants.
Prophecy Coal gained nearly 17% on the Toronto exchange on Monday, trading at 11 cents per share.