London Mining is now constructing coke ovens with a capacity of 200ktpa in the Boyaca region of Colombia, a region with significant local production of high quality coking coal. Commissioning of the coke ovens has commenced with first production expected in January. London Mining continues to expect to reach the 200ktpa coke production run rate in Q3 2012.
The Company has agreed in principle a supply agreement with a local coking coal producer at a small discount to local market prices for up to 300ktpa of low volatility coking coal from mines being developed on neighbouring properties to London Mining’s coke ovens. Following a high-level drilling programme on these properties, London Mining decided to enter into a supply agreement in preference to the original proposed joint venture structure. The Company is in the process of investigating the potential of further concessions both in proximity to the coke ovens and also in other areas with high coking coal potential. An agreement has been signed for a concession in the vicinity of the coke ovens and which the Company is currently drilling with the expectation of developing a low and mid volatility coking coal mine to supply the coke ovens.
London Mining is also in a number of discussions with port and transport companies regarding short and medium term export arrangements.
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