Northern Railways, a subsidiary of Mongolian metallurgical coal development company, Aspire Mining, is currently working with its nominated EPC contractor and consortium partner, China Railways Construction Bureau 20 Group (CRCB20G), to source bridge funding from a Chinese bank to fund predevelopment activities for the Erdenet-to-Ovoot railway.
The railway, which will connect Aspire’s Ovoot metallurgical coal project to the Mongolian Rail network, forms part of Mongolia’s national rail policy to provide rail access to its northern provinces. The 547 km line will also connect into the Russian railway network at Kyzyl with a border crossing at Arts Suuri, allowing freight to travel between Russia and China through Mongolia.
At full capacity it will be able to move 30 million tpy of bulk commodities, agricultural and general goods and passengers, including transit freight between Russia and China. The funding will enable the completion of a rail bankable feasibility study, environmental permitting and a number of commercial agreements, including the EPC and debt refinance.
“It should be noted that there is no guarantee that the bridge funding negotiations will be successful and that Northern Railways will gain access to this funding facility,” the company noted in a statement.
Separately, Northern Railways has agreed with Mongolia’s Ulaanbaatat Railway Corp. (UBTZ), to establish a working group to work through the technical and commercial issues relating to the connection of the Erdenet-to-Ovoot railway into the country’s existing rail network, which is operated by UBTZ.
“With the continued support of the Mongolian government, CRCB20G and now with the support of UBTZ, the Erdenet-to-Ovoot-to-Arts-Suuri railway continues to progress as a viable inclusion in Mongolia’s Economic Corridor between China and Russia,” said Aspire’s Managing Director, David Paull.
ASX-listed Aspire Mining is the largest coal tenement holder in Mongolia’s northern provinces. In addition to its Ovoot metallurgical coal project, it owns a 50% interest in the Ekhgoviin Chuluu Joint Venture, which owns a 90% stake in the Nuurstei metallurgical coal project. A road-based production operation could start at Nuurstei this year.
Edited by Jonathan Rowland.