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Mineral line accord signed

16 Oct 2009

MONGOLIA: Surveying and detailed design of a new railway to open up the mineral deposits in the South Gobi area is expected to get underway in November, following the signing of a formal accord between the Transport Ministry and Russian Railways on October 15.

The memorandum of agreement was signed by RZD President Vladimir Yakunin and Mongolia’s Minister of Roads, Transportation, Construction & Urban Development Khaltmaa Battulga during an international workshop in Ulaanbataar on the strategic development of Mongolia’s rail network.

Other participants in the conference included Director of the Infrastructure Development joint venture company Vitaly Morozov, the President of Korea Rail Network Authority Cho Hyun-yong, and Wang Linshu, Senior Adviser at the Chinese Ministry of Railways, along with representatives from Ivanhoe Mines and Boston Consulting Group.

Intended both to serve mineral reserves and to encourage wider economic development in the Omnogovi region, the new railway will start from the current branch terminus at Dzüünbayan in neighbouring Dornogovi. It will run west to the Omnogovi regional capital at Dalanzagdad, paralleling the Chinese border.

Under an agreement signed in Ulaanbataar on May 13, the line will be promoted by Infrastructure Development, a limited company in which RZD holds a 50% stake, Mongolian mining group Erdenes MGL holds 25%, and Mongolian Railway (MTZ) the remaining 25%. RZD also holds a 50% stake in MTZ which was transferred from the Russian government earlier this year. RZD has agreed to contribute financing and resources up to US$250m towards the cost of the new line project.