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Mongolian government approved key railway line extension to Russia

The Mongolian government has approved a new National Rail Policy, which includes the extension of rail from Erdenet to Ovoot and on to the Russian border at Arts Suuri (“Northern Rail Line”). This represents a new important rail connection between Russia, Mongolia and through the Trans-Mongolian Railway to China. The Rail Policy also stipulates the required rail gauges for specific rail lines in Mongolia’s south. The Mongolian Government is now empowered to negotiate a Concession Agreement for the railway between Erdenet to Ovoot as the first stage of the Northern Rail Line.

This Rail Policy decision follows the recent addition of the Erdenet to Ovoot railway onto the Mongolian
Government’s Concession List of ‘”Approved Projects”.

In the medium term, the Erdenet to Ovoot railway is positioned to form a critical link within a highly strategic rail network connecting the Ulug Khem coking coal basin in Russia’s south with the Trans- Mongolian Railway through to China. The Ulug Khem coking coal basin is estimated to contain approximately 2.5 billion tonnes of metallurgical coal reserves and when combined with Aspire’s wholly owned Ovoot Coking Coal Project , will represent a major new long term source of high quality coking coal. Exports from this very large coal basin in Russia to China are expected to provide substantial transit freight volumes for both the Erdenet to Ovoot railway and the Trans-Mongolian Railway.

“The Mongolian Parliament’s decision provides the rail solution to unlock the value of the Ovoot Project. We expect that this railway, along with the current expansion of the Trans Mongolian Railway towards 100mtpa, will have a dramatic effect on the competitiveness of northern Mongolian coal in both the Chinese and seaborne coking coal markets. In addition, this new railway will bring major economic and social benefits to the Northern Mongolian provinces as economic development and regional integration is fast-tracked”, stated Aspire’s Managing Director Mr David Paull.

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