Parliament approves two new railway routes

13th of 9, 2018


On June 29 Parliament approved amendments to the State policy on railway to provide for two new rail routes -- Erdenet-Artssuuri and Zuunbayan-Khangi. This means a total of 1,900 km of railway will be built in the second stage of implementation of the policy, including the following previously approved routes: Nariinsukhait-Shiveekhuren (45.5 km), Tavantolgoi-Gashuunsukhait (267 km), Khuut-Tamsagbulag-Numrug (380 km), and Khuut-Bichigt (200 km).

The 780-km line from Erdenet to Artssuuri at the border with Russia will go through the Ovoot coking coal deposit area in Khuvsgul aimag operated by Aspire Mining registered on the Australian Stock Exchange. The 280-km other route will start at Zuunbayan bag in Dornogovi aimag and end at Khangi, which borders China.

A preliminary estimate puts the total construction cost of the Erdenet-Artssuuri line at $2 billion, and the work will take 4-5 years. Aspire is already building the 574-km Erdenet-Ovoot railway at a cost of $1.25 billion under a 30-year concession agreement. The Erdenet-Artssuuri route has been included in the north sector -- Kuragino-Kyzyl-Tsagaantolgoi-Artssuuri-Ovoot-Erdenet-Salkhit-Zamyn-Uud-Erenhot-Ulaantsav-Zhangjiakou-Beijing-Tianjin -- of the Mongolia-Russia- China economic corridor. At Artssuuri it will be connected to the Kyzyl-Kuragino railway in Russia, and thus be part of the proposed Asia-Europe link, allowing Mongolian minerals to be exported to third markets from sea ports using the Russian railway network.

As regards the 280-km Zuunbayan-Khangi railway, it will actually extend the Sainshand-Zuunbayan line in Dornogovi to Khangi on the China border, and cost over $1 billion, going by the estimates of the 267-km Tavantolgoi-Gashuunsukhait railway. Once in use, the new railway will bring down to 318 km the current distance of 908 km from iron ore mines to the Chinese border at Zamyn-Uud. The savings in transport expenses would allow miners in the Darkhan-Selenge region to reduce the price of iron ore by $4-$5/t, offering competition to Australian producers as also to domestic mines in China. Coking coal and copper concentrate could also be transported on the Zuunbayan-Khangi railway, and sold at a competitive price in China’s main industrial region – the Baotou metallurgical cluster.

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