TERRACOM SIGNS MONGOLIAN COAL DEAL

The agreement is for a total of approximately 7.5 million tonnes over the term and has pricing linked to a commercially in confidence mine gate pricing structure that reflects the seaborne market. Payment terms are USD in the form of 100% Irrevocable Letter of Credit issued by a first class international bank. The Kingho Group will primarily use the BNU coal for their internal consumption at their coke plants.

TerraCom has fully commissioned the Baruun Noyon Uul coking coal mine in the South Gobi Mongolia and is focussed on becoming become one of the largest and highest quality coking coal producers in Mongolia, providing exceptional value for its steel-producing customers.

Inner Mongolia Kingho Group is a wholly subsidiary of China Kingho Group, which was formed in 1996 and is one of largest privately held mining and energy companies in China. Over recent years, China Kingho Group has developed significant expertise in resources development, coal washing, coal chemical, fine chemicals, clean energy, coal gasification and logistics.

Since it was founded in 2000 Inner Mongolia Kingho Group has imported more than 26 million tonnes of raw coal from Mongolia and has the capacity to wash 8 mpta of coal, produce 4 mtpa of coke, produce 400,000 tpa of methanol from coke oven off-gas and produce 200 million coal ash bricks.

The parent company, China Kingho Group produces 15 mtpa of coal, processes 12 mtpa of coal and produces 9 mtpa of coke.

In addition to its Mongolian ambitions, TerraCom is also focused on developing two priority projects in Queensland, Australia: the large thermal coal Northern Galilee Project and the high energy prime thermal coal Springsure Project.

In order to support further growth and expansion, TerraCom continues to evaluate cash generative assets for potential acquisition. In this regard, the Company has announced that it has reached agreement to acquire the Blair Athol Coal Mine (BA) in Queensland, Australia from the Blair Athol Joint Venture, with production scheduled to recommence in 2016.

The Company is also evaluating the acquisition of a hard coking coal mine in Kalimantan, Indonesia, a 500,000 tpa operation located in close proximity to road, barge and port infrastructure connecting it to the seaborne coal market.

Source:http://www.heraldsun.com.au/business/breaking-news/terracom-signs-mongolian-coal-deal/news-story/40722a69363212f163c95f7a7bd7ee2d