Revision of Aspire Mining’s pre-feasibility study for the western section of the proposed Erdenet to Ovoot rail line has indicated a more direct route further to the south will save $200 million in construction costs and reduce ongoing annual operating expenses.
The revision was announced by Snowy Mountain Engineering Corporation (SMEC) and also highlights that the alternate route poses less risk from an environmental, geotechnical and hydrological perspective.
The revised rail line is 595km in length, down from 628km and its forecast cost is now US$1.3 billion which includes a 20% contingency buffer. This estimate assumes annual rail capacity of 22 million tonnes and further construction cost savings can be made by reducing the initial capacity to 10-12 million tonnes and then increasing it as additional freight commitments arise.
Aspire says a further advantage of the new southern alignment is that it crosses into the Zavkhan province to the south, potentially providing rail access to this area.
The company’s managing director David Paull says, “Aspire and its rail subsidiary, Northern Railways LLC, continue to work on advancing the Erdenet to Ovoot railway by providing more engineering definition and progress towards a bankable feasibility study. When the definition is at a suitable stage the company will start the process to seek a rail concession and the other supporting permits and approvals required from the government of Mongolia.”
Aspire is developing a large-scale open pit mine operation at the Ovoot site in northern Mongolia. It is the largest coking coal deposit in the region at 331 million tonnes.
The project covers 509sqkm across three separate licences with much of the exploration focusing on the Ovoot licence area. The rail line is considered key infrastructure for access to rail facilities required to connect the Ovoot project to the Trans-Mongolian Railway and through to the global steel industry.
The company’s other Mongolian assets include the Nuramt, Jilchigbulag and Zavkhan projects.