MMC’s coal transport operations consist of a truck-and-road model, with combined operations via its coal handling facility at Tsagaan Khad (“TKH”) and directly from UHG to stockpiles at the Ganqimaodu (“GM”) border crossing in China. The Company has its own truck maintenance and repair facilities essential for maintaining the safety and efficiency of its coal transport operations. The transportation is carried by its own fleet of around 450 double-trailer trucks and supplemented by third-party contractors, to move products from its two operating mines to TKH for further transshipment for export to GM border port in China.
The 245-km paved road between UHG mine and Gashuun Sukhait (“GS”) border checkpoint in Mongolia serves as MMC’s primary infrastructure for the transport and delivery of coal products. The UHG-GS road was built by MMC in 2011 under the BOT agreement between the Company and the Government of Mongolia (“GoM”) and was transferred to the GoM in 2014. In order to eliminate bottlenecks at the Mongolian side of the border and support its growth objectives, the Company financed and executed expansion of the GS border checkpoints jointly with Erdenes Mongol LLC in 2012. The investment increased the annual border-crossing capacity at GS to an estimated 25-30 Mt.
In 2012, the Company completed construction of a 32-km paved road between BN and UHG mines which has a sufficient capacity to support the interconnected operations of the two mines. The road serves as a reliable connection for transporting coal from the BN mine to the coal processing facilities at the UHG mine.
In addition to the main coal delivery operations to GM in China, the Company is continuing with its efforts to conduct trial shipments to various seaborne market destinations including Japan, Taiwan, Germany and India.