Mongolia Energy Corp (MEC), a former technology company that remade itself into a natural resources developer in 2007, will deliver its first coking coal cargo this August and is looking at projects beyond Mongolia, a senior executive said.

Mineral rich Mongolia is attracting more attention from global and MEC, which is still in the money losing, ramp-up phase of developing its Khushuut site - an open-pit mine in the Khovd province in western Mongolia - aims to supply quality coal to China's steel industry.

Because of Khushuut's location, MEC plans to serve the steel industry in China's Xinjiang Province with Bayi Steel - a unit of China's largest steelmaker Baosteel Group - as its first designated customer. Chief Executive James Schaeffer said in an interview during the Reuters Global Mining and Steel Summit on Wednesday that MEC would see cash flow kick in after it started delivery of coking coal to Bayi,.

MEC has appointed Leighton Holdings, the world's biggest contract miner, as its contractor for the development and a 340 km road linking the Khushuut mining area to the Mongolia-China border, which is about 550 km to Urumqi, the provincial capital of Xinjiang, has been built.

MEC aims to sell its coking coal at an FOB price of USD120 per tonne versus a production cost of about USD35 per tonne. Including transportation, its coal may sell at roughly USD165 per tonne.

After the firm announced the move to invest into Mongolia's coal industry, its shares climbed more than 65 times in less than 18 months to a high of HKUSD18.06 in June 2008. But the lack of an earnings track record in the past few years pushed the stock back to HKUSD3.81 on Wednesday, down 4.3 percent this year versus a 3 percent loss in the broader market.

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