Dr Graeme Hancock is the company’s new chief operating officer, joining the company from Rio Tinto in Mongolia three weeks ago.
During his presentation on day one of the Mongolia 2011 Investment Summit in Hong Kong, Hancock confirmed that the IPO process was underway and a candidate for a chief financial officer had been identified as part of the assembling of a management team.
The company has appointed Goldman Sachs, Deutsche Bank, Macquarie and BNP Paribas as advisors for the IPO.
Hancock didn’t mention any figures but previous media reports indicated the IPO could raise $US2-3 billion in Hong Kong, London and Ulaanbaatar.
Meanwhile, Erdenes has signed an offtake agreement with Chalco and shipped its first coal earlier this month.
Hancock said 170,000 tonnes of ore from the Eastern Tsankhi area of the massive Tavan Tolgoi deposit had been produced to date and the target was 1 million tonnes by the end of the year.
“I think it’s going to be challenging to achieve but it’s still the target,” he said.
On January 1 contractors Macmahon Holdings and Operta BBM will take over the mining to target production of 3Mt of coal in 2012, 6Mt in 2013, 10Mt in 2014 before ramping up to the ultimate target of 15Mtpa of run of mine coal from the fourth year of operation.
Of the 15Mt, 10-11Mt will be a washed saleable product.
The Eastern Tsankhi portion of the project comprises two thirds coking coal and will have a 66-year mine life at least.
It has a life of mine strip ratio of 2.4:1, which Hancock said was “amongst the lowest in the world for coal mining operations”
The workforce currently comprises around 150-160 workers and will increase to 700 next year and eventually 1000 by full production.
Hancock also said the company expected to award the contract for the coal handling preparation plant within two months, for targeted completion by mid-2014.
Erdenes owns the licenses for the Western Tsankhi portion as well, though that is set to be developed by an international consortium including Peabody Energy and Shenhua.
Hancock said there was no arrangement yet in place in terms of royalties but that could only add value to the company.
