Fluorspar is seen as an important future growth area in
Mongolia
Genghis Khan, the most famous of all Mongolians, is known
for creating the world’s largest empire in the 13th century,
stretching from Poland in the west, to Korea in the east, and from Siberia in
the north to the Gulf of Oman and Vietnam in the south.
Khan, famed for his brutality, should also be recognized for
creating the world’s the first trade route, in the Yam courier system.
This system, known as the Silk Road, opened the region to
trade and information, providing a passage between Asia and Europe.
And, as present-day companies have discovered, this trading
principle still functions, with Mongolia both encouraging and facilitating
foreign investment.
The country’s largest export is copper, followed by apparel,
livestock, animal products and cashemre, according to Economy Watch.Its major export partners are China, Canada, UK, and
Luxembourg.
Fluorspar, although slightly further down the list, is also
seen as an important future growth area.
Mongolia produced 420,000 tpa in 2012, according to the United
States Geological Survey (USGS).
It it the third-largest producer in the world, with most of
its supply feeding China and Russia.
In fact, insufficient transportation infrastructure means
Mongolia’s only markets for fluorspar are these two countries, largely via the
Trans-Mongolian Railway, which connects China (at Zamyn-Uud) and Russia (at the
Altanbulag port).
While Mongolian production has recently stuttered as global
demand has fallen, most market commentators believe that the market will pick
up.
Prima-ed for a great deal
Vancouver-based Prima Fluorspar signed a letter of intent (LOI)
in September with New York, US fund Firebird Management-which holds a 99.8%
majority stake in Berkh Uul JSC, owners of the Delgerkhan fluorspar mine.
“The acquisition of the Delgerkhan mine positinos Prime to
become a major global fluorspar producer and supplier,” CEO Robert Brick told
IM.
The deposit holds almost 10 m tonnes of ore grading 33.47%
CaF2.
The Delgerkhan fluorspar mine has an interesting history,
having worked as a fluorspar mine since the 1950s, with approximately 90,000
metres drilled int eh period between 1950-2000.
“Delgerkhan is one of the largest in the world,” James
Passin, fund manager at Firebird, told IM.
Passin has been developing the mine since 2011.
“We have been working on drilling the deposit to produce an
IN 43-101 compliant resource. There is fluorspar that we would intend to
produce through an open-cast mine. The rest of the deposit will be produced by
underground mining by rehabilitating the existing shafts,” he told IM.
Historically, the mine produced metallurgical-grade
fluorspar (metspar), but Firebird believes”there’s a potential to build a
flotation plant and produce acid grade as well as mespar”.
The next steps for the project are to dewater and remediate
the existing mine infrastructure, with a target date of Q4 2014 for first
production, at the run rate of 120,000 tpa.
Mongolia Minerals Corp.
Mongolia Minerals Corp. is developing its Dai Uul project in
the Dornogovi Province. The project is not as advanced as Firebird’s, but it
recently increased its reserve estimation.
The company underwent an extensive drilling campaign in 2012
to enlarge the existing reserve base, and is working towards establishing a
JORC-compliant resource.
“It bears noting that under the Mongolian reserve code, to
be included in reserve calculations, resrve blocks need to have an average
grade of 25% CaF2 or above, which is higher than typical international norms,”
James Rodriguez de Castro, managing director, told IM.
Testwork is currently underway to explore the possibility of
recovering additional fluorspar by including lower –grade ore into the economically
exploitable reserves through pre-concentration.
Lower costs
Both Passin and Rodriguez de Castro agree that developing a
project in Mongolia has cost advantages.
“We have a huge cost advantage on the existing
infrastructure and mining assets, which will allow us to get to production
without having to invest a lot of capital, compared to a lot of other large
fluorspar deposits,” Passin said.
Source:www.indmin.com (Industrial Minerals
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