Aspire Mining (ASX:AKM) has received preliminary results from a Scoping Study indicating there are no technical obstacles to building a rail connection from Ovoot to the Russian city of Kyzyl.
This rail connection provides the remaining link to create the new Steppe Railway trade connection between China and Russia through Mongolia.
In August 2015, Aspire subsidiary Northern Railways was granted a 30 year concession by the Mongolian Government to build and operate the 547 kilometre railway to extend Mongolia’s national rail network from Erdenet to its Ovoot Coking Coal Project.
Notably, the geography is suitable for efficient high capacity bulk commodity rail with capital costs to construct base infrastructure ranging from US$2 million to US$2.6 million per kilometre.
Capital costs for the Ovoot-Arts Suuri alignment is estimated at US$450 million to US$550 million for the 230 kilometre to 250 kilometre line while the 300 kilometre to 330 kilometre Arts Suuri-Kyzyl could cost from US$675 million to US$775 million.
The Scoping Study is prepared by Aspire’s wholly-owned rail infrastructure subsidiary Northern Railways and follows on the recent execution of the Concession Agreement to build and operate the Erdenet to Ovoot railway in Mongolia.
It is aimed at providing preliminary capital cost assessments, alignment paths and lengths and the early identification of any engineering, construction or operational challenges to develop rail infrastructure through this terrain.
David Paull, managing director, commented:
“Being able to identify an efficient path connecting Ovoot to Kyzyl is important in demonstrating the strategic value of the Steppe Railway from Erdenet through to Kyzyl.
“The Erdenet to Ovoot section of this railway, which Northern Railways has recently received a
Concession for, reflects the first half of the Steppe Railway.”
Ovoot-Arts Suuri-Kyzyl Rail Alignments Study
The Ovoot-Arts Suuri-Kyzyl rail connection provides the remaining link to create a new trade connection between China and Russia through Mongolia
This is not only consistent with Chinese driven policy to build the Silk Rail Road but will also unlock the development potential of Russia’s Elegest Coking Coal Basin located near Kyzyl.
It used data sets and parameters established in the completion of the Pre-Feasibility Study for the Erdenet to Ovoot Railway.
These were then applied specifically to the region between Ovoot and Kyzyl.
Northern Railways engaged Trimble Planning Solutions Pty Ltd, based in Melbourne, Australia, to assist with running alignment simulations.
Additional analysis is required to understand the capital cost and operating cost trade-offs in order to identify the optimal alignments.
The terrain between Ovoot to Arts Suuri is relatively flat and similar to the Erdenet to Ovoot terrain which presents excellent conditions for building and operating efficient bulk commodity rail.
While the Arts Suuri to Kyzyl alignment is also generally flat and suitable for rail development, there is about 30 to 40 kilometres that needs to traverse a mountain range.
The most suitable alignment appears to traverse through a relatively narrow pass. This requires further investigation into alignment and geometric parameters to balance capital construction costs and operational factors to achieve optimal outcomes in both directions.
While still at an early stage, the planned rail connection between Ovoot to Kyzyl is of strategic value to Aspire Mining given its role as part of the new Steppe Railway trade connection between China and Russia through Mongolia.
Preliminary results from the Scoping Study follows execution of the Concession Agreement to build and operate the Erdenet to Ovoot railway.
Adding value, the Steppe Railway is consistent with Chinese policy to build the Silk Rail Road.
Aspire had $4 million in cash and term deposits as at 30th June 2015.
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