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Progress at Mongolian coal railway

World Coal,

Aspire Mining will work with a China Railways Construction Corp. subsidiary to complete the first stage of the Erdenet to Ovoot Rail Bankable Feasibility Study in Mongolia.

This comprises desktop engineering of the entire 547 km alignment, based on 1:5000 scale maps currently being prepared and delivered by Aspire’s, subsidiary Northern Railways.

The agreement with China Railway 20 Bureau Group Corp. (CR20G) is a strong endorsement and vindication of the project given that its parent CRCC is a Fortune 500 company.

The railway is a key requirement to unlocking the value of the Ovoot metallurgical coal project and future earnings from mining and production from the project for Aspire.

Adding to the interest, Noble Group – Asia’s largest diversified commodities trading company – retains an option to acquire 10% of Northern Railways and fund 10% of the rail development capital.

The execution of the agreement follows the recent inclusion of the Northern Rail Line in the Mongolian Government’s National Rail Policy, the inclusion of Phase 1 (Erdenet – Ovoot section) on the Concession List of approved projects, and the signing of an EPC Framework Agreement with CR20G.

“Both Aspire and CR20G see the benefits of maintaining the recent momentum for the Erdenet to Ovoot railway,” managing director David Paull said.

“Commencing desktop engineering now will put Northern Railways into a better position to negotiate a Concession Agreement with the Mongolian Government and advance funding discussions,” Paull added.

Rail bankable feasibility study

Preliminary work has commenced on the first 250 km of maps and an initial payment of US$250 000 has been paid. 

Further payments will be conditional on Northern Railways receiving a rail concession and funding. 

The first stage work comprises desktop engineering for the entire alignment in order to provide additional project definition. 

Outputs will include a detailed bill of quantities, detailed construction schedule and a preliminary capital cost estimate. 

Post the granting of a Concession Agreement for the Erdenet – Ovoot railway, and given funding is in place, Northern Railways will look to commit to the balance of the bankable feasibility study. 

In a statement, Aspire said the total cost to Northern Railways would be US$6.5 million (+ VAT) for both the first stage and the final bankable feasibility study.

CRCC has significant engineering and construction capabilities working on major projects including roads, highway, light and heavy rail, bridges, tunnels, housing and other projects both domestically in China and internationally.

CR20G employs over 20,000 personnel and has significant international experience completing recent rail projects in Angola, Mongolia and Mozambique.

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