Aspire Buys Mongolia Coal Mine Venture With NobleYuriy Humber
Aspire Mining Ltd., the Australian firm developing coking coal assets in northern Mongolia, said it agreed to buy 50 percent of a venture with Noble Group Ltd. to expand its footprint in the Asian nation.
Aspire will issue 10 million shares to Xanadu Mines Ltd., which currently holds the stake in the 50-50 venture with Noble, the Perth-based company said today in a statement. Aspire will give Xanadu a further 5 million shares should the coking coal deposit the venture controls be able to certify that it holds 30 million metric tons of resource.
Noble and Aspire are expanding their partnership in Mongolia, which already involves the Hong Kong-based commodity trader providing project financing, port and rail access for the Australian miner. Noble, which owns 7.7 percent of Xanadu Mines, is seeking to boost its supply of metallurgical coal from Mongolia as the nation neighbors China, where about half of the world’s steel is produced.
“Noble and Aspire have also agreed to work together to identify additional near term Mongolian coking coal production opportunities with terms to be agreed on a case by case basis,” Aspire said in the statement.
Aspire was unchanged at 3.5 Australian cents in Sydney trading at the close, after earlier rising as much as 5.7 percent.
The venture with Noble owns 60 percent of the Nuurstei coking coal deposit that sits between two of Aspire’s projects in northern Mongolia. Coal from Nuurstei could blend with that of Aspire’s Ovoot project, providing marketing and operation synergies, the Australian company said.
A mine at Nuurstei would also help Aspire load the railway route it’s planning to build to connect its northern projects with the east of Mongolia, home of the bulk of the nation’s railroads. This would open up the potential to transport coal south to China or north to Russia.
Aspire said it will make an additional $200,000 payment to Xanadu once Nuurstei wins a mining license. Noble Group retains control of all coal sales from Nuurstei, Aspire said.
Rio Tinto Group’s SouthGobi Resources Ltd. owns 18.8 percent of Aspire, while Noble has a 15 percent stake.