The Company is engaged in open-pit mining at the Ukhaa Khudag (UHG) deposit located within the Tavanтolgoi coal basin in Southern Gobi of Mongolia, approximately 560 km from the country’s capital city Ulaanbaatar. The UHG mine is also strategically located approximately 240 km from the Mongolian-Chinese border and about 600 km from Baotou, China, an important railway transportation hub providing access for Mongolian coal to the largest steel producing provinces in China.
Energy Resources LLC, an indirect wholly-owned subsidiary of the Company, is a holder of the mining license MV-11952 for the UHG coking coal deposit. Covering a licensed area of approximately 2,960 hectares in size, the UHG deposit had around 680 Mt (as received basis) of JORC-compliant measured, indicated and inferred resources as of 31 December 2016 and 333 Mt of ROM coal reserves as of 1 January 2018 respectively. According to Wood Mackenzie, the vast majority of the reserves falls within the highest quality parameters and is ideal for manufacturing needs at markets across the world. Due to its low stripping ratio, favorable geological conditions and proximity to its target market in China, MMC has lower operational costs than the majority of its competitors around the world.
The Company commenced commercial mining operations at UHG in April 2009 and mining operations at UHG are conducted through two 12-hour shifts, 7 days a week, 365 days a year, and adaptable to inclement weather conditions. Complete with all necessary utility infrastructure facilities including 18MW on-site power plant and water supply system, the UHG serves as an operational hub for processing ROM coal from both UHG and Baruun naran mines.