Aspire Mining Limited’s Mongolian rail infrastructure subsidiary Northern Railways LLC has received its construction licence for the Erdenet to Ovoot Railway from the Mongolian Government. This is a precondition for start of negotiations for the grant of a long term lease with the Government over the land strip on which the rail line will be built.
It will also provide for Northern Railways to then enter into land use agreements with the local communities. It allows for the establishment of a commission comprising Northern Railways, the Ministry of Roads and Transport and UBTZ (Mongolia’s national railway operator) to agree traffic management protocols and the point at which the Erdenet to Ovoot Railway connects to the existing UBTZ network.
This key licence follows the signing of a concession agreement with Northern Railways on September 3, 2015.
The rail project spans 547km and forms part of Mongolia’s policy to provide rail access to its northern provinces through the extension of its existing rail network from Erdenet to the Russian/Mongolian border at Arts Suuri with a Russian connection planned to Kyzyl. At full operation, the project will have capacity to annually move 30 million tonnes of bulk commodities, agricultural, general and passenger freight including transit freight between Russia and China.
It will also provide access to Aspire’s world-class Ovoot Coking Coal Project, which is the second largest coking coal project by reserves in Mongolia as well as the Nuurstei Coking Coal Project 90% owned by the Ekhgoviin Chuluu Joint Venture, in which Aspire owns 50% and is the operator.
Depending on the results of the 2015 exploration program which aims to identify a JORC-compliant resource, future positive economic studies, funding and the grant of necessary approvals and licenses, Nuurstei could commence a road-based production operation as early as 2016, and access the new Erdenet to Ovoot railway as early as two years from commencement of its construction.
Aspire’s managing director David Paull said, “The continued support of the Mongolian Government to progress the development of the Erdenet to Ovoot Railway is appreciated. Over the last three months since the concession was signed substantial progress has been made in terms of completing conditions needed to be met under the concession agreement. We have also hosted a country visit to Mongolia by senior executives from a large Chinese banking institution.
“Northern Railways is actively pursuing funding options to complete the other rail concession conditions precedent including environmental permitting and the completion of the Bankable Feasibility Study,” he said.