Canada's Prophecy Coal Launches Mongolian Mine Mouth Power Project

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Mining company Prophecy Coal (TSX:PCY) (Vancouver, British Columbia) has been given a positive feasibility study for the company's 600-megawatt (MW) mine mouth power project in central Mongolia. The report was prepared by Steag Energy Services (Essen, Germany), which specializes in the planning, financing, construction and operation of fossil fuel-fed thermal power plants.

The scope of the project study covers the technical specification, deployment and financial analysis of a thermal plant that is to be constructed next to the company's Chandgana Tal coal deposit, which has a measured resource of 140 million tons of coal.

The power plant and the coal deposit already have received construction and mining licenses from the Mongolian authorities in 2011.

Selection of the engineering, procurement, construction and management contractor and project-financing planning are now taking place and are expected to be concluded this year. Construction is scheduled to begin in April 2013, with the first 150-MW unit being commissioned in 2015. The balance of three units will be commissioned in April 2016, October 2016 and April 2017. The project is expected to have an operating life of 30 years.

Total investment in the project will be $744 million, including the power plant, overhead transmission lines and administrative costs. Leighton Asia (Ulaan Bataar, Mongolia) conducted a mine costing study, and financing will take place at the project level by Prophecy's wholly owned East Energy Development (Ulaan Bataar, Mongolia), which holds the construction license to develop the mine mouth power plant

A project scoping study is to be undertaken to develop the mine mouth power plant to 3,600 MW in order to transmit power to China.

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