Aspire Mining has identified further potential capital savings for the Northern Railways Erdenet to Ovoot rail project which is key to commercializing its Ovoot Coking Coal Project in northern Mongolia.
The company has received a report which also confirms the project is viable from an engineering and railway operational aspect. “This study further confirms a viable and efficient solution to bring Ovoot coking coal, and other resource and agricultural products from northern Mongolia to world markets,” says managing director David Paull.
A field inspection into the rail alignment by SMEC International was designed to confirm a number of key assumptions used in the Rail Pre-Feasibility Study Revision (RPFSR) that SMEC prepared for Aspire. It focused on constructability from the viewpiont of logistics, geotechnical, hydrology, environmental, river crossings and railway operations.
During the field investigation the SMEC team “encountered nothing that would prevent the railway from being built, nor anything that would add significantly to the estimated cost”.
The study determined the capacity of the logging of 14 potential quarry sites for ballast across the 547km alignment, while spacing of these quarry sites from the rail line are no more than 30km.
The RPFSR, moreover, included an allowance to engineer a protection against the impacts of permafrost on the formation. Investigations also confirmed the alignment length potentially impacted by permafrost conditions is 139km, substantially less than the 200km assumed in the RPFSR.
No frozen ground conditions were encountered during the field visit, according to the company. The visit identified 12 locations where changing the alignment should reduce three large bridge structures and the length of several large bridges, while avoiding swampy ground and route around a congested industrial zone of Erdenet city where the Northern Rail Line will connect and rail yards will need to be constructed.
In the conclusions it was noted “the project is viable from an engineering and railway operational aspect, within budget guidelines as developed and contained in the RPFSR”. The RPFSR released on April 10 identified a lower US$1.3 billion capital expenditure for the Northern Rail Line – US$200 million savings – as well as reductions in operating costs. This was achieved by a more direct route to the south for the proposed rail line from the Ovoot project to Erdenet, Mongolia’s second-largest city.
Studies have also confirmed that Ovoot coking coal has a superior blend-carrying capacity and can be blended with coal from the government-owned Tavan Tolgoi mine in southern Mongolia to upgrade the latter’s coking coal properties. Ovoot has a probable reserve of 255 million tonnes run-of-mine with open-pit resources of 253.1 million tonnes and underground resources of 27.9 million tonnes.