Aspire Mining Limited announced that it has signed a memorandum of understanding (MoU) with MTGT LLC, the owner of the Khuren Chuluut Iron Ore Project, to provide five Mtpa of freight capacity on its Erdenet to Ovoot Railway.
The company noted that the MoU could result in making Khuren Chuluut the first major user of the planned railway.
Khuren Chuulut is a large iron ore deposit located approximately 50 kilometers north west of the Khuvsgul Province capital of Moron, and 60 kilometers north of the approved rail alignment for the Erdenet-Ovoot Railway.
“The project needs rail to Erdenet to be able to connect to customers in China. Mongolia currently exports iron ore to Chinese customers along the Trans-Mongolian Railway,” Aspire said about the agreement.
The MoU will reportedly cover the sharing of development progress, mutual support in funding activities, and the provisional allocation of five Mtpa of freight capacity as soon as the rail line has been extended to a proposed connection point approximately two-thirds of the way along the 549 kilometer railway. It is expected that the Northern Rail Corridor will see significant growth in demand for transport of at least 15 Mtpa, growing to 30 Mtpa in the long term.
Aspire’s Managing Director David Paull said that the MoU demonstrates that the Erdenet-Ovoot Railway will not only benefit Mongolia’s coking coal industry. Paull noted that once completed, the Northern Rail Corridor, of which the Erdenet-Ovoot Railway is an important part, will see the transport of a range of resources, agriculture and manufactured goods.