Aspire Secures $69.9M Lump-Sum EPC Deal for Ovoot Coal Plant and Rail Terminal
Aspire Mining has secured a $69.9 million lump-sum EPC contract with China Coal Technology and Engineering Group’s international arm, significantly de-risking its Ovoot Coking Coal Project and targeting first coal production by late 2027.
- US$69.9 million lump-sum EPC contract executed with CCTEG-IEC
- Fixed-price structure reduces capital cost and schedule uncertainty
- Contract includes vendor financing with deferred payments and insurance
- Ovoot CHPP designed for 2.5 Mtpa ROM coal processing capacity
- First coal production and export targeted for Q4 2027
A Major Milestone for Ovoot
Aspire Mining Limited has taken a decisive step forward in advancing its Ovoot Coking Coal Project by signing a US$69.9 million lump-sum engineering, procurement, and construction (EPC) contract. The agreement, inked with the International Engineering Company of China Coal Technology and Engineering Group Corp. (CCTEG-IEC), locks in a substantial portion of the project’s capital costs under a fixed-price framework. This move materially reduces the uncertainties that often plague large-scale mining infrastructure projects, particularly in volatile commodity markets.
Partnering with a Proven Industry Leader
CCTEG-IEC brings over five decades of coal mining and processing expertise, including experience delivering advanced coal handling systems in Mongolia’s challenging environments. Supported locally by Gobi Infrastructure Partners LLC, the contractor will oversee detailed design, procurement, construction, and commissioning of both the Ovoot Coal Handling and Preparation Plant (CHPP) and the Erdenet Rail Terminal (ERT). The turnkey contract follows the FIDIC Silver Book model, ensuring clear accountability and performance guarantees.
Infrastructure Designed for Growth and Efficiency
The CHPP is engineered to process up to 2.5 million tonnes per annum of run-of-mine coal, producing 2.0 million tonnes of saleable fat coking coal annually. Meanwhile, the ERT will facilitate efficient, enclosed road-to-rail transloading, critical for export logistics. Both facilities are designed with future expansion in mind, underscoring Aspire’s long-term vision for the project.
Financial Strategy and Risk Mitigation
Notably, the contract includes vendor financing with deferred payments covering 60% of the contract value, carrying an interest rate of 6.5% per annum and insured by China Export & Credit Insurance Corporation (Sinosure). This arrangement eases peak funding demands and smooths cash flow, aligning with Aspire’s broader financing strategy to minimize shareholder dilution. The lump-sum price is also approximately 1.5% below prior engineering estimates, offering further cost confidence.
On Track for First Coal in Late 2027
The project timeline targets mechanical completion and commissioning of the CHPP and ERT by the fourth quarter of 2027, coinciding with the expected completion of a public-private partnership road that will enable coal haulage between the two sites. This schedule provides a clear pathway to first coal production and export, a critical milestone for Aspire and its investors.
Looking Ahead
With major statutory approvals in place and a strong balance sheet, Aspire is well-positioned to execute this next phase. The EPC contract represents a significant de-risking event, enhancing project credibility and financing prospects. However, as with all large infrastructure projects, execution risks and market dynamics remain factors to watch closely.
Bottom Line?
Aspire’s fixed-price EPC contract marks a pivotal step toward delivering Ovoot’s first coal by 2027, but execution and financing will be key to watch.
Questions in the middle?
- How will Aspire manage potential delays or cost overruns outside the EPC contract scope?
- What are the detailed terms and conditions of the vendor financing and deferred payments?
- How will evolving coal market conditions impact Aspire’s sales and financing plans post-2027?
