Mongolia plans coal rail link to China by 2021: official

SHANGHAI (Reuters) - Mongolia aims to complete a railway from its Tavan Tolgoi coal project to the Chinese border by 2021, a Mongolian official told Reuters on Thursday.

The rail link from Tavan Tolgoi would have the capacity to deliver 30 million tonnes of coal a year to China, said Samdandovj Ashidmunkh, chief investment officer of the state firm running the project.

The link will be completed within two years of an overseas initial public offering of stock in Tavan Tolgoi scheduled for the first quarter of 2019, Ashidmunkh, of Erdenes-Tavan Tolgoi, said on the sidelines of a forum in Shanghai on China-Mongolia cooperation in mining.

Mongolia expects demand for high quality coking coal from China’s steel sector to increase, but many analysts in China believe steel production is nearing its peak and could start to fall.

Tavan Tolgoi is the world’s largest undeveloped coking coal mine with 7.4 billion tons of estimated reserves.

The project was originally set to host a thermal power plant that would supply Rio Tinto Ltd’s massive Oyu Tolgoi copper mine, which is currently being expanded.

But Mongolia’s inability to find funding has put the onus on Rio Tinto to build its own power facility.

Ashidmunkh said the government still planned to build a power plant at Tavan Tolgoi.

“It would be too much to have two power plants (in the region). Even if (Oyu Tolgoi) built its own power plant they will still need to purchase our coal,” he said.

Analysts attending the forum expressed scepticism about Mongolia’s ambitions, saying logistic costs still eroded the competitiveness of Mongolian coal and demand could soon begin to taper.

“China and Mongolia are greatly divided in the perception of coal resources at present,” said Chang Yijun, chief analyst with the consultancy Fenwei Energy.

Mongolian coal would only be competitive in southern China, where more imports were required, he said.

Source:Reuters

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Northern Railways receives PEA for Ovoot-Arts Suuri rail link in Northern Mongolia

Northern Railways (NR) has received a preliminary economic assessment (PEA) for a rail link between the Mongolian Ovoot Tolgoi mining complex and the Arts Suuri port on the Russian-Mongolian border.
NR is a rail subsidiary of Aspire Mining, which focusses on developing railway infrastructure and stimulating economic development in Mongolia.
The PEA from Perfect Road Project has validated the construction of the 238.6km expansion, which is to be built with a $581.82m investment. It is expected to connect to the planned rail development in the Tuva region, southern Russia.

The cost of investment for the extension is in line with a previous scoping study conducted in 2015.
A number of options to further minimise the cost of construction have also been included in the PEA.
Aspire Mining executive chairman David Paull said: “The delivery of this preliminary economic assessment provides further confirmation of the viability of the Northern Rail Corridor.
“The company has provided this PEA to the Mongolian Ministry of Roads and Transport and Mongolian rail operator UBTZ Railways to provide further justification to proceed to implement the Ovoot to Arts Suuri rail project as part of the Northern Rail Corridor.”
The Northern Rail Corridor is a joint initiative of the governments of Mongolia, China and Russia.
It has the potential to become one of the fastest, lowest cost rail routes to connect North Eastern China, Mongolia, Russia and Europe, thereby improving regional trade and offering additional economic benefits.

Source:www.railway-technology.com

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Northern Mongolian Rail Corridor agreement signed

MONGOLIA: The Northern Railways rail infrastructure subsidiary of Aspire Mining has signed an engineering, procurement and construction framework agreement with China Railway 20 Bureau Group covering Phase 1 of the Northern Mongolian Rail Corridor. This follows parliament’s approval of the government’s national rail policy in October.

Phase 1 of the multi-user mixed traffic line would run start at Erdenet on the existing network and run 547 km west to Ovoot to serve Aspire’s planned coking coal mine developments.

The framework agreement announced on November 5 covers the completion of engineering design works, and provides the basis for negotiations between Northern Railways and CR20G for a fixed-price turnkey EPC contract. This would be awarded subject to appropriate allocation of risk, adherence to international standards and the receipt of necessary approvals, including the signing of a concession agreement with the government.

CR20G is also to assist with sourcing finance from China and elsewhere, and Chinese financial institutions have commenced preliminary due diligence on both the mining and railway projects.

Source:http://www.railwaygazette.com/

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Agreement signed to develop Mongolian railway

The Mongolian Ministry of Roads and Transportation has signed an agreement with JSC Russian Railways to modernise and extend Mongolia’s rail network.

The agreements were signed during a weeks visit to Mongolia by Russian President, Vladimir Putin.

Along with modernising and expanding the operations and capabilities of Ulaanbaatar Railways, it was also agreed to investigate the expansion of railway in northern Mongolia from Erdenet past Aspire Mining’s Ovoot coal project to the Russian border at Arts Suuri.

Russia and Mongolia are hoping to improve Russian transit freight to China through Mongolia’s rail network – increasing it from a relatively nominal amount at present to 20 million tpa by 2020.

The priority in modernising and expanding the railway is to develop the dual tracking of the main trans-Mongolian railway, which will increase rail capacity to 100 million tpa. The two parties will also examine the feasibility of electrifying this line.

Aspire Mining noted that the agreement could have significant implications for its Ovoot metallurgical coal project – linking the mine into the Russian rail system to encourage transit freight from Russia.

Aspire’s managing director, David Paull, said “Aspire and our subsidiary, Northern Railways, welcomes this important new rail agreement between Russia and Mongolia that explicitly recognizes the Ovoot coking coal project as a key user of this new rail transit corridor. This agreement officially puts rail in the north of Mongolia on the map.”

“Northern Railways continues to be in close contact with UBTZ with regards to working together through the next steps and a joint development of the Erdenet to Ovoot (Northern Rail Line) section,” Paull added. 

Adapted from press release by Sam Dodson

Source:http://www.worldcoal.com/

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