Mongolian metallurgical coal explorer Aspire Mining has, through its rail subsidiary Northern Railways LLC, signed an MOU with Ulaanbaatar Railways JSC (UBTZ) to cooperate on a number of matters to progress the commercialisation of the Erdenet to Ovoot Railway.
The signing occurred during a conference in Ulaanbaatar sponsored by UBTZ focusing on developments that will see substantial freight volume growth through to 2030.
Aspire announced on January 9 that it had received the First Stage Feasibility Study from China Railway First Survey and Design Institute Group Co Ltd which confirmed that the Erdenet to Ovoot Railway is financially and technically feasible.
Northern Railways’ new MOU will progress a number of key commercial agreements required to support construction funding of the railway, including the commercial terms upon which the Erdenet to Ovoot Railway users can access the UBTZ line to move freight through to end markets in Mongolia, south to China or north to Russia.
This would encompass a capacity nomination regime and long term tariff structures. It is expected that the Erdenet to Ovoot Railway users will become the largest users of UBTZ rail services over time.
Commercial agreement will also be needed in respect of UBTZ’s traffic management and line maintenance capabilities as well as cooperating on the rehabilitation of the Erdenet to Salkhit spur line that connects to the main line. This is a 164km line that has limited capacity availability to absorb the substantially higher capacity that will be required to service the Erdenet to Ovoot Railway users and will require significant rehabilitation over time.
Aspire’s managing director David Paull said, “A close working relationship between Northern Railways and UBTZ will be essential for the successful development of the Northern Rail Corridor which will add significant long term demand for UBTZ’s rail services”.