Prophecy Coal May Stop Mining in Mongolia on Weak Prices: "However, the company halted operations in July after producing about 300,000 tons. It shipped just 50,000 tons to Russian customers, stopping exports after it became unprofitable due to high shipping costs and mining royalties. The remaining stockpiles are being sold in the Mongolian market.
"We're subsidizing the coal supply to the Mongolian government at a break-even price at best," Mr. Lee said, estimating Prophecy's production cost around $30 a ton at Ulaan Ovoo against sale prices as low as $20 a ton to Mongolian power plants.
The move to stop production at the mine followed SouthGobi Resources Ltd.'s (1878.HK) announcement in June that it would suspend mining at its flagship Mongolian coal mine due to weak demand and uncertainty over whether its mining license would be suspended by the Mongolian government after Aluminium Corp. of China Ltd., known as Chalco, offered to buy a controlling stake in SouthGobi in April."
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