Aspire Mining subsidiary Northern Railways LLC has entered into a cooperation agreement with China Gezhouba Group Company Limited (CGGC) to advance the Erdenet to Ovoot Rail Project. This section of rail in northern Mongolia will form part of the Northern Rail Corridor.
The agreement will see Northern Railways provide CGGC with access to the existing technical database and work with CGGC to source debt and equity funding for the Rail Feasibility Study and EPC construction funding from Chinese funding institutions.
The two will also work together to promote the Northern Rail Corridor and connectivity with the Russian rail system.
CGGC is a subsidiary of China Energy Engineering Corporation Limited that focuses on design, construction, investment and operation of projects in the fields of hydropower, thermal power, nuclear power, wind power, energy transmission, highways, railways, bridges, airports, ports, and industrial and civil buildings.
CGGC works in 142 countries and has 99 overseas branches with 30,000 employees worldwide. It was established in the early 1970s to complete the Three Gorges Dam, then China’s largest infrastructure project.
Aspire says combining the large-scale construction and financing expertise of CGGC with the rail technical abilities of the Northern Railways consortium member, China Railway 20 Bureau Group Corporation (CR20BGC), would create a powerful and compelling consortium to attract funding for this rail project, which forms part of China’s One Belt One Road initiative.
Aspire’s managing director David Paull said, “Aspire through its subsidiary is directly participating in the One Belt One Road initiative, a vision to enhance trade connectivity with China which will have dramatic and far reaching consequences for global trade.
“This has been recognized by China Gezhouba Group, a very large state-owned enterprise which is also one of the pre-eminent Chinese contractors with a deep experience base in arranging funding for large projects that they participate in, as well as providing direct investment.
“The combination of CR20BGC and CGGC further demonstrates the strategic regional importance of the Northern Rail Corridor.”
Aspire also notes that Russian media are reporting that an agreement was signed during the St Petersburg International Economic Forum this month to develop the Kuragino-Kyzyl Railway, which is the Russian section of the Northern Rail Corridor that would connect to the Trans-Siberian Railway at Kuragino.
This railway is 410km-long with construction expected to be completed by 2022. It is being financed through a concession agreement with the owners, including Tuva Energy and Industrial Corporation, RZD Russian Railways JSC and Leader Asset Management. The total cost is estimated at 163.5 billion roubles.
The Northern Rail Corridor will extend from Tianjin Port in China through Beijing, Ulaanbaatar, Erdenet, Ovoot, Arts Suuri and Kyzyl to Kuragino. Rail currently exists between Tianjin and Erdenet. Erdenet to Ovoot is the subject of a rail concession with Northern Railways.
With the Kyzyl to Kuragino section now agreed, discussions between Mongolia and Russia are continuing in relation to the remaining section between Ovoot and Kyzyl.