Aspire Mining Limited · ASX:AKM
Aspire Mining — Coaltrans World Anthracite Conference, St Petersburg, June 2014
22 slides from Aspire Mining's conference presentation, Jun 18, 2014
Slide 1: Establishing New Infrastructure to Support Mine Development
For personal use only Aspire Mining Limited Establishing New Infrastructure to Support Mine Development Coaltrans World Anthracite Conference, St Petersburg, June 2014 1
Slide 2: Important information
For personal use only Important information •Nature of this document: This document has been prepared by Aspire Mining Limited (“Aspire”, “AKM”, or the “Company”) and contains summary information about the Company and its subsidiaries as at the date of release of this document. The information in th
Slide 3: Important information cont.
For personal use only Important information cont. •Production Target Assumptions: The following are key assumptions used to achieve the ODP first year target of 5Mtpa of marketable coking coal. 1) In the eight months prior to commencement of first year ODP production, a 23 million BCM waste removal
Slide 4: Establishing new infrastructure to support mine development
Establishing new infrastructure to support mine For personal use only development Rail quickly becomes superior over road: • Opex cost savings < Capex • Bulk commodity transport drives high vehicle movements ‐ Environmental costs ‐ Community impacts • Rail investment ‐ Provides long term economic an
Slide 5: Road vs Rail Transport: Economic considerations
Road vs Rail Transport: Economic considerations For personal use only • Road access is generally readily accessible to bulk commodity producers • Bulk commodities can be transported by road over short Comparison Road v Rail Costs: distances at low volumes $250 Ovoot ‐ Erdenet • No economies of scale
Slide 6: Road vs Rail Transport: Social Considerations
Road vs Rail Transport: Social Considerations For personal use only • Remote bulk commodity projects generally requires investment in road quality to improve truck performance. This is an investment in the community however: • Road transport carries risks including environment damage, livestock loss
Slide 7: Infrastructure investment is socially responsible
Infrastructure investment is socially responsible For personal use only • Rail investment is an important way Mongolia Khuvsgul Bulgan Zavkhan that Resources industry can give back Human development index 0.778 0.709 0.770 0.731 to the community Life expectancy index 0.728 0.651 0.771 0.720 Educatio
Slide 8: Rail investment provides lasting long term social benefits
Rail investment provides lasting long term social benefits For personal use only A case study of rail “haves” and “have nots” 12,000 Comparison of Northern • Orkhon province enjoys access to rail and Provinces GDP per capita has a thriving manufacturing industry producing: 10,000 ‐ food & beverages
Slide 9: Mongolian Rail Policy
Mongolian Rail Policy For personal use only Moving to reflect Mongolia’s role as a major trading corridor Rail Route Current Status Trans‐Mongolian railway upgrade Feasibility study underway. Phase 1 upgrade from Ulan Ude (Russia) – Jining (up to 34Mtpa capacity) to be completed end (China) of 2015.
Slide 10: Rail infrastructure key to resources development in Russia's Tuva and Mongolia's north
Rail infrastructure key to resources development in For personal use only both Russia’s Tuva region and Mongolia’s north • Connects the northern Mongolia and Russia’s Tuva province directly onto the Trans‐Mongolian Railway network for access to international markets • Incorporation within a rail net
Slide 11: Unlocks development potential for large scale coal projects
Unlocks development potential for large scale coal For personal use only projects Russia considering access to China and other countries via western Mongolian border at Arts Suuri Project Estimated Owner Reserves Potential Russian Users of Railway: Elegest2 895 Mt Tuva Energy Industrial • Ulug Khem
Slide 12: Materially shorter distance to export Elegest coking coal to China
Materially shorter distance to export Elegest coking coal to For personal use only China through the Northern Rail Line Kyzyl – Far East Russia Distance Savings Savings (km) (km) (%) Via Trans‐Siberian 5,714 Railway Via Northern Rail Line 5,269 445 7.8% Kyzyl – China (Erenhot) Via Trans‐Siberian 3,4
Slide 13: Geographical position is one of Russia's and Mongolia's strengths
Geographical position is one of Russia’s and Mongolia’s For personal use only strengths 13
Slide 14: Yet Russia provides limited coking coal volumes to China
Yet Russia provides limited coking coal volumes to China For personal use only 10,000 Chinese Coking Coal Imports Seaborne 9,000 Mongolia 8,000 Russia 7,000 China Met Coal Imports Quantity 000' Tonnes 6,000 2010: 47.2Mt 5,000 2011: 44.6Mt 4,000 2012: 53.5Mt 2013: 75.4Mt 3,000 2,000 1,000 0 Mar Qtr 2
Slide 15: Volume of freight traffic on the Mongolian railway network
Volume of freight traffic on the Mongolian railway network For personal use only For 2009‐2012 and forecast for 2015 and 2020 (Mt) 15 Source: JSC Russian Railways presentation :Remarks by the Vice President of OAO Russian Railways Morozov Vadim’s” dated 5 November 2013
Slide 16: Eurasia as a land bridge between Asia and Europe
Eurasia as a land bridge between Asia and and Europe For personal use only The existing rail routes of delivery of goods between Asia‐Pacific to Europe ‐ Northern Rail Line could connect with the Kyzyl – Kuragino railway currently under construction = part of an international rail network 16 Source:
Slide 17: Russian and Mongolian exports would benefit from a high-capacity Trans-Mongolian Railway
Russian and Mongolian exports would benefit from a high‐ For personal use only capacity Trans‐Mongolian Railway • Upgrade to a 100 mtpa capacity dual track between Russia, Mongolia and China will create an efficient land bridge • To be upgraded from Ulan Ude (Russia) – Jining (China) = 1,660km • Rus
Slide 18: The Northern Rail Line will create a long term competitive advantage
The Northern Rail Line will create a long term competitive For personal use only advantage for Elegest and Ovoot coking coals Indicative cost targets Elegest Ovoot (US$/t) (US$/t) Rail to Erdenet 10.28 5.47 (opex only) Rail to ErenhotNote1 20.84 20.84 (based on 2c/t/km) 31.12 26.31 Border costsNote2
Slide 19: Elegest and Ovoot coking coal could have a long term cost advantage
Elegest and Ovoot coking coal could have a long term For personal use only cost advantage Metallurgical Coal (HCC + PCI + SSCC) Targeted cost per tonne FOR China border for Elegest and Ovoot and coking coal Ovoot and Elegest coking coal has a significant geographical advantage that requires rail dev
Slide 20: Takeaways from today
5 takeaways from today For personal use only 1. Rail quickly becomes superior to road transport of bulk commodities 2. Rail investment provides long lasting social and economic benefits to local communities 3. Rail economics work best when part of a network. Returns & costs are sensitive to volume 4
Slide 21: Russia and China strengthen investment and trade ties, and eye Mongolia as efficient trade route
Russia and China strengthen investment and trade ties, and For personal use only eye Mongolia as efficient trade route Russia‐China Recent Deals Mongolia‐Russia‐China Tripartite • “Russia, China Sign $400 bn Gas Deal After • Mongolia has agreed to establish a working group Decade of Talks”, Bloomber
Slide 22: Contact details
Contact details For personal use only Aspire Mining Limited ABN: 46 122 417 243 ASX Code: AKM Web: www.aspiremininglimited.com AUSTRALIA Level 2, Suite 20, 22 Railway Road Subiaco, Western Australia, 6008 MONGOLIA Sukhbaatar District, 1st Khoroo, Chinggis Ave‐8 Social Insurance Department Building A
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