Mines to be connected by railroad built on concession agreements

Ulaanbaatar /MONTSAME/ Concluding concession agreement on building railroad to connect Erdenet with Ovoot coal mine was assigned Monday to the Minister of Industry D.Erdenebat. The Cabinet permitted the Minister to sign the “build-operate-transfer” (BOT) agreement on behalf of Mongolian Government with “Northern Railways” LLC. In accordance with the State Policy on Railways, the General Guidelines of Mongolia for Economic and Social Development in 2015 and the Program on Measures for Overcoming Economic Difficulties, immediate infrastructure planning complying with the settlement statuses of the areas of the mineral deposits with future potentials, building of 500 km Mogoin Gol-Erdenet railroad on concession agreement or on alternative funding and building of Erdenet-Ovoot railroad are supposed to start in the second half of this year. The executing company will provide the estimated cost of USD 1.3 billion, as reflected in the pre-feasibility study, for completing the construction of the 547 km railroad within five years, according to the draft agreement. The project execution – railroad and base structure – will be transferred to the Government after 30 years. Ovoot coking coal deposit is the second largest in Mongolia and has estimated reserves of 255 million tonnes, with growing potential.