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Erdenet to Ovoot Concession Agreement completed

Published by
World Coal,

The completion of the Concession Agreement to build and operate the Erdenet to Ovoot railway (rail project) has been carried out during signing ceremonies in Mongolia and China.

The rail project covers 547 km and forms part of Mongolia’s Rail Policy to supply rail access to its northern provinces through expanding its existing rail network from Erdenet to the Russian/Mongolian border at Arts Suuri with a Russian connection planned to Kyzyl.

Authorised representatives were at the signing, including representatives of the Government of Mongolia (GOM) Investment Agency, Aspire Mining, Northern Railways LLC, China Railway 20 Bureau Group Corp. (CR20G) and China Railway First Survey & Design Institute (FSDI). Both CR20G and FSDI are subsidiaries of Fortune-500 listed China Railway Construction Corp.

No changes to the material terms of the Concession Agreement that was announced on 12 August 2015 have been made. It provides for up to five yr construction timeframe followed by a 30 yr operational period after which 100% of the base railway structure will be vested to the GOM.

Northern Railway has 18 months to carry out various conditions in order to begin the construction of the rail project. This includes the completion of a bankable feasibility study, EPC contract, connection agreement to existing railway at Erdenet, financing, licences and permits necessary to construct and operate the project.

At full operation the rail project will have capacity to move 30 million tpa of bulk commodities, agricultural, general and passenger freight including transit freight between Russia and China.

Aspire’s Managing Director, David Paull, said: “the company has entered an exciting phase in progressing the development of our Ovoot Coking Coal Project … The Erdenet to Ovoot railway provides not only a transport solution for Ovoot coking coal but its planned connection with Russia creates an international rail transport route running directly through northern Mongolia where the majority of our assets are located.”

Paul concluded: “Having the support of China Railway subsidiaries CR20G and FSDI is significant to the development of the Erdenet to Ovoot railway as they bring extensive international experience in the design and construction of railway, as well as connections with Chinese financiers keen to participate in infrastructure projects along the Silk Road.”

Edited from press release by Harleigh Hobbs

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