PERTH (miningweekly.com) - Junior coal developer Aspire Mining has signed a nonbinding memorandum of understanding (MoU) with Mongolian rail giant JSC Russian Railways to discuss the extension of the Trans-Mongolian Railway to the Ovoot coking coal project.
The MoU would explore the development of a strategic partnership between Aspire’s infrastructure subsidiary and Infrastructure Development LLC (ID) to build, own and operate an extension of the existing Trans-Mongolian Railway at Erdenet through to Ovoot, via the town of Moron.
Aspire said on Thursday that the MoU provided a framework to discuss, amongst other things, the application for a rain concession for the new rail line, investment and network rail capacity and integration.
“The securing of the MoU with Russian Railways represents a step forward in the development of infrastructure to support the Ovoot coking coal project,” said MD David Paull.
“In addition, it demonstrates the importance of the Erdenet-Moron-Ovoot rail line to the economic and national interest of Mongolia. The developent of this rail line would establish an important new source of export revenues for Mongolia and routes to seaborne markets through the Russian rail system.”
A recently completed prefeasibility study into the Ovoot project suggested that the project could be developed over two stages, with Stage 1 requiring a capital expenditure of $565-million to produce six-million tons of coal a year, from 2016, with Stage 2 requiring a capital input of $710-million, increasing production to 12-million tons a year, from 2018.
The staged development would derisk the production ramp-up and would enable Stage 1 operational cash flow to underpin the proposed rail connection from Ovoot.