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Mongolia Has To Change Its Railroads To Account For An 85 Millimeter Difference In Track Spacing Mongolia Has To Change Its Railroads To Account For An 85 Millimeter Difference In Track Spacing(0)

The planned extension of a trans-border railway in Mongolia will make it faster and cheaper to ship coal to China.

Currently, most coal from Mongolian mines is transported to the Chinese border by trucks on paved roads. The railroad would be a less costly shipping method, but until now, a tiny difference in the spacing of rails has made this a less viable option.

Mongolia and China use two different rail gauges. Mongolia’s 1,520 millimeter broad gauge dates back the Soviet-era. China uses the slightly smaller 1,435 millimeter standard gauge, 85 millimeters narrower than the rail gauge used in Mongolia.

Mongolia has long resisted moving to the standard smaller gauge — which would remove the time-intensive process of changing wheels — partly as an effort to keep its “powerful neighbor at arm’s length amid fears about China’s political and economic hegemony in the region,” Reuters noted.

Last year, for example, Mongolian officials said a new railroad tracks stretching from the country’s biggest coal field, Tavan Tolgoi, to the Chinese border would be built using Russia’s wider broad gauge instead of China’s standard gauge, even though using the broad gauge would increase transport costs.

Using the broad gauge rail will cost $3 more per ton of coal than the standard gauge, but “the overall cost of exporting coal by rail will [still] be 60 percent, or $14 per ton, lower than the current method of exporting by truck,” Bloomberg writes.

In an interview with Bloomberg, Dale Choi, founder of Ulaanbaatar-based Independent Mongolian Metals and Mining Research, suggested that Mongolia’s decision to stick with the broad gauge was related to issues of national security.

“The business community would have preferred the standard gauge,” Choi told Bloomberg last May. “I guess the geo-political consideration is much more important to authorities.”

Mongolia was under Chinese rule from 1691 to 1911 and the two countries share a large border. Although the BBC notes that both nations have “managed to overcome historical tensions” while strengthening their business relationship, fears about China’s economic dominance in the region do not seem to have completely dissipated.

In April, it was announced that a separate railway linking Mongolia to China would be built using China’s smaller rail gauge, according to Reuters.

Khaltmaa Battulga, chairman of the Mongolian Democratic Union, an opposition party, publicly denounced the project. According to Business News Europe, Battulga said on a TV show in June that, “Tanks can easily penetrate into Mongolia in no time if we build a railway with a [narrower] gauge track, the same used in China.”

Business News Europe explains:

This minor detail represents a huge technical barrier between the two countries, since each train crossing the border is forced to make long stops to change the wheels. But while Mongolia’s growing army of mining companies consider it a logistics bottleneck, Mongolians themselves see it as a matter of national sovereignty – a necessary shield protecting their sparsely populated homeland and its vast mineral resources from the ever-present “Chinese threat.”

According to the report, Mongolian president Tsakhiagiin Elbegdorj was critical of Battulga’s comments, as it jeopardized Mongolia’s efforts to improve its economic partnership with China.

Meanwhile, the Mongolian Ministry of Roads and Transportation and JSC Russian Railways agreed in September to extend the main trans-Mongolian railway to increase trade between Russia and China.

Here’s a map of the proposed updated rail system:

Aspire MiningThe Mongolian Rail system with planned upgrades and extensions. The extension to Russia in the north is highlighted in blue in blue and the rail to China in the south is in yellow.

China signed an agreement of establishing railway company with Mongolia China signed an agreement of establishing railway company with Mongolia(0)

On April 7th China and Mongolia signed an agreement of establishing a joint venture railway company.

According to the agreement, the 2 countries will build a railway from Gashuun Sukhait to Ganqimaodao port with length of 18 kilometers, which made it convenient for China to import coal from the world’s largest unmined Tavan Tolgoi mine.

Source – China steel information centre and industry database


Aspire Mining’s Ovoot on the express line with rail funding EOI’s in Mongolia Aspire Mining’s Ovoot on the express line with rail funding EOI’s in Mongolia(0)

Aspire Mining’s (ASX: AKM) Ovoot Coking Coal Project could take a major step forward after it received several non-binding Expressions of Interest totalling US$1.3 billion for financing of the key Northern Rail Line in Mongolia.

Binding rail funding and grant of a rail concession would unlock the riches of the Ovoot project, which has coal quality comparable with the best in the world.

The US$1.3 billion in EOIs meets the capital expenditure estimate highlighted in the Rail Pre-Feasibility Study completed by SMEC International in April 2013.

This is interesting given that a follow-up report in September 2013 had identified potential capital expenditure savings by taking a more direct route further to the south for the proposed rail line.

The EOIs were sourced by Aspire from a number of financial institutions and the Noble Group as part of its ongoing discussions with the Government of Mongolia in relation to the grant of a rail concession.

While the EOIs are non-binding, they indicate a broad interest to fund the Northern Rail Line and the company intends to commence definitive financing negotiations immediately upon the grant of a rail concession.

Northern Rail Line

The proposed multi-use Northern Rail Line is a key requirement for commercialising the Ovoot project in the Khuvsgul province in northern Mongolia.

It is the focus of Northern Railways LLC, Aspire’s Mongolian infrastructure subsidiary which seeks to extend the Trans-Mongolian Railway from its current terminus at Erdenet through to Ovoot.

The Northern Rail Line will be multiuse, providing an alternative, cheaper and environmentally friendly transport solution for agricultural products, general freight, bulk materials and passengers.

Besides serving the Ovoot project, the Northern Rail Line will assist the sustainable long term growth of local industry and the economy through the creation of jobs, resource and small-medium business development, and export opportunities.

Aspire had in April 2013 received a Rail Pre-Feasibility Study Revision from SMEC International confirming that it could save US$200 million on the Northern Rail Line to US$1.3 billion by taking a more direct route further to the south.

It also highlighted the potential for further capital expenditure cost savings by de-rating haulage capacity from 22 million tonnes per annum to an initial starting capacity of between 10Mtpa and 12Mtpa.

A follow-up report in September confirmed the viability of the project from an engineering and railway operational aspect.

This also noted that some minor changes to the alignment would eliminate major river crossings and the associated bridges while taking the more direct southern route would allow Aspire to take advantage of widespread  sources of ballast.

Ovoot Coking Coal Project

Ovoot has a Probable Ore Reserve of 255 million tonnes Run of Mine. It has Open Pit Resources of 253.1 million tonnes and underground resources of 27.9Mt.

Aspire has significantly progressed the project in recent months through:

–    Signing port access agreements to penetrate the lucrative European markets and expanding its access to North Asian markets;
–    Identifying a low capital development for the project by using contractors wherever possible for a 5 million tonne per annum initial project, reducing initial capital costs to US$144 million from the original US$459 million for a 6Mtpa Stage 1 plan;
–    Financing support with the receipt of non-binding letters of intent from Deutsche Bank and BHF Bank to provide US$40 million and US$50 million respectively in Export Credit Agency backed loans;
–    A US$20 million working capital facility made available to the company from Noble Group;
–    Interest from potential customers to acquire Ovoot Project coking coal; and
–    Studies confirming Ovoot Coking Coal has superior blend carrying capacity and can be blended with coal from the Government owned Tavan Tolgoi mine in southern Mongolia to upgrade the latter’s coking coal properties.

Ovoot continues to draw interest – late last year, another two non-binding Memoranda of Understanding were signed with large Russian buyers for up to 1.3 million tonnes per annum of coking coal.

This brought the total coking coal under supply agreements to 6.9Mtpa, well above the 5Mtpa capacity under its low capital development option.

Interest followed recent negotiations between Mongolia, Russia and China to fund and construct upgrades to road, rail and pipeline infrastructure within Mongolia, creating a significant transit corridor between Russia and China.

Proposed changes include upgrading capacity along the Trans-Mongolian Railway to 100Mtpa.


There is strong momentum building for Aspire Mining’s Ovoot Coking Coal Project with the US$1.3 billion in non-binding Expressions of Interest representing a massive step towards progressing the Northern Rail Line that would link the project with the existing Trans-Mongolian Railway.

Ovoot has coal that ranks amongst the best in the world. This includes a superior blend carrying capacity that can add significant value to Tavan Tolgoi’s low and non-coking coals.

Coupled with the increased recognition from this week’s recognition as a key supplier of raw materials to the Mongolian Government owned Sainshand Park and confirmation that power is easily available to the project under its non-binding Letter of Intent with the coal-fired Zavkhan Power Plant, Aspire is clearly running at full steam for Ovoot.

Binding rail funding and grant of a rail concession would unlock the economic riches and returns of Ovoot and send the Aspire Mining valuation sky-bound.  The EOI’s are value accretive as they are with a number of financial institutions and the Noble Group.  With the new momentum is opportunity and we see potential share price upside to $0.07 – $0.075.

China’s Shenhua to invest in cross-border rail link from Mongolia China’s Shenhua to invest in cross-border rail link from Mongolia(0)

(Reuters) – Shenhua Group, China‘s top coal producer, will form a joint venture with partners in Mongolia to build a cross-border rail link that will help ship coal to China, the company confirmed on Wednesday.

The deal marks a change in attitude in Mongolia, which has long sought to keep its powerful neighbour at arm’s length amid fears about China’s political and economic hegemony in the region. China buys more than 90 percent of Mongolia’s exports and has sought big stakes in the country’s strategic assets.

A signing ceremony for the new rail joint venture was held in the Mongolian capital of Ulan Bator on Monday. A spokesperson for the Chinese company, the parent of listed Shenhua Energy Group, confirmed the deal to Reuters on Wednesday.

The spokesperson said the final share structure for the joint venture has not been decided.

A Mongolian government official, however, told Reuters the Chinese firm will own 49 percent of the project, which will involve the construction of a 13-kilometre rail link from the Chinese border to a terminal where coal is delivered by trucks.

Yondon Manlaibayar, the director general of the department of railways at the Roads and Transportation Ministry, said a consortium of Mongolian firms, including state-owned miner Erdenes Tavan Tolgoi and the Hong Kong-listed Mongolian Mining Corporation, would share the remaining 51 percent.

Mongolia plans to spend $5.2 billion on the expansion and upgrade of its railway network, and last year hired Samsung C&T to lead construction of a 217-kilometre route south from the Ukhaa Khudag mine in the South Gobi region towards China.

A route to China would reduce the cost of shipping coal to customers in China – now largely done by road – and would also improve Mongolia’s access to China’s ports.

But an additional 27 kilometres of rail connecting the Shenhua line and Samsung C&T’s line will be needed to complete the route. In the meantime, the temporary drop-off point will be established for trucks to deliver coal to the Shenhua joint venture rail to be carried into China, said Manlaibayar.

“They (the joint venture partners) don’t want to wait for us to complete the whole line,” said Manlaibayar.

Mongolian Prime Minister Norov Altankhuyag concluded a visit to China last October with an announcement that an agreement was made for the delivery of one billion tonnes of coal to Shenhua over the next 20 years.

The Shenhua joint venture project and the connecting 27 kilometres of line will be built using China’s rail gauge, while the rest of the line uses the Russian standard, said Manlaibayar. A station for gauge transference will be built where the Samsung-led rail line ends, he said.

Mongolia’s rail policy requires the use Russia’s wider gauge standard, but some in the industry worry about the added costs of having to change standards at the end of the Samsung line.

(Additional reporting by David Stanway in BEIJING; Editing by Tom Hogue)

Opportunities of the international container block train Mongolian Vector discussed in Lithuania Opportunities of the international container block train Mongolian Vector discussed in Lithuania(0)

During the meeting with the Mongolia’s delegation in Lithuania’s Ministry of Transport and Communications, the new opportunities of the international container block train Mongolian Vector were discussed. Lithuania suggested new branch line of one of the routes of the Mongolian Vector, informs LETA/ELTA.

The country suggested including the Klaipeda State Seaport in the route Ulan Bator-Moscow-Brest.

“I hope that Lithuania’s striving to connect the route of the train Mongolian Vector to our project Viking will be implemented,” said Deputy Minister of Transport and Communications Arijandas Sliupas.

Amarjargal Gansukh, Minister, Ministry of Road and Transportation of Mongolia, should conduct a visit to Lithuania on June 3. It is planned to sign the bilateral memorandum of the Lithuania-Mongolia cooperation in the transport sphere.

Lithuanian and Mongolian Foreign Ministries held the 4th political consultations on 28 March in Vilnius. The sides discussed issues of bilateral cooperation, relations between the European Union and Mongolia, partnership within the United Nations and other international organizations as well as regional issues, the Ministry of Foreign Affairs has informed.

The Lithuanian delegation was led by the Vice-Minister of Foreign Affairs of Lithuania Neris Germanas and the Mongolian delegation was headed by the Deputy Minister of Foreign Affairs of Mongolia Damba Gankhayag.

According to Germanas, the potential for bilateral economic cooperation has not yet been fully exploited. The officials shared their opinions on future actions in this area, discussed cooperation in the transport sector and the advancement of bilateral economic relations.

Lithuanian and Mongolian diplomats also discussed events in Russia, the situation in Ukraine and Crimea.

New Train Ticket Offers 53-Day Rail Trip Around The World New Train Ticket Offers 53-Day Rail Trip Around The World(0)

London, England (CNN) – A 53-day journey by train might sound like murder on the Orient Express, but one enterprising British travel company is offering rail tickets that take nearly eight weeks to circumnavigate the globe.

As you’d expect for the $36,500 price tag, you won’t be spending six weeks cooped in the cheap seats listening to other people yammering into their cell phones.

The ticket offered by Great Rail Journeys is first class most of the way, crossing three continents in the kind of style you’d associate with a golden age of rail travel — albeit without the top hats and tailcoats.

En route, passengers get to experience some of the world’s most luxurious trains, including the Tsar’s Gold Private Train from Mongolia, the Venice Simplon Orient-Express and the British Orient Express Pullman.

The itinerary begins in London on May 18, 2015.

“We’ve got some pretty long journeys in our portfolio, but we’ve never done the full circumnavigation,” Julian Appleyard of Great Rail Journeys said.

The itinerary includes a trip to Monument Valley in the American Southwest.

The itinerary includes a trip to Monument Valley in the American Southwest.

Passengers will fly to New York and then spend 20 days crossing North America by train.

They call in at Washington, Chicago and Denver and then sample a few classic rail rides such as Colorado’s scenic Royal Gorge route and the steam-powered Durango & Silverton line.

Ten epic train journeys

There’s a side trip to the Grand Canyon, a sojourn in Los Angeles and a boat ride to San Francisco, where passengers take to the air once again to reach Shanghai.

The trip sticks firmly to the rails from then on, taking passengers from Xian, home of terra cotta warriors, to Beijing and then on to Russia via Mongolia.

The journey links up with the epic Trans-Siberian line to reach Moscow before pressing on into Europe.

After calling at Warsaw, Prague, Vienna, Innsbruck and Venice, it heads back to London.

Appleyard says the company had sold its first tickets but is planning to limit numbers to about 25 to “keep it fairly exclusive.”

“There is a huge number of people who are interested in rail as a method of travel,” he said.

Neither oceans nor the Great Wall will get in the way of the round-the-world train trip.

Neither oceans nor the Great Wall will get in the way of the round-the-world train trip.

“This is quite clearly the longest and most expensive trip we’ve ever done so it’s going to appeal to the wealthy and, at 53 days, people with time on their hands.”

If 53 days sounds a little on the slow side, another company offers a similar journey in reverse, via Canada, that takes a mere 40 days.

Ffestiniog Travel, based in Wales, charges $32,765 for its escorted tour starting May 3.

Or you could just catch a plane.

Variable Gauge Bogie Non-stop from Seoul to Russia by KTX Variable Gauge Bogie Non-stop from Seoul to Russia by KTX(0)

The Korea Railroad Research Institute announced on March 30 that it developed a variable gauge bogie compatible with both the wide gauges used in Russia and the standard gauges in Korea.

A bogie is a type of box that surrounds train wheels. It is made up of a bogie frame, wheels, axles, bearing boxes, springs and the like, and faces the upper parts of rails. South and North Korea and China use standard gauges with a width of 1,435 mm, whereas the width of those used in Russia is 1,520 mm. Such wide gauges ensure higher transport capacity but cost more.

If a train departing from South Korea is to reach Europe via North Korea and Russia, the bogie has to be replaced to suit the gauge. This is why the late North Korean leader Kim Jong-il used to spend five to seven hours, during his visits to Russia, at the boundary between the north and Russia.

As mentioned above, the problem associated with bogie change has been a roadblock to railway transport from Korea to Russia. However, the institute’s new development is expected to be a perfect solution. The new bogie can not only be adjusted to both of the gauges, but also run at a speed of up to 280 km per hour. Trains employing the bogie do not have to be stopped even in the boundary area, but are capable of driving at 10 to 30 km per hour while switching gauges.

The institute’s bogie has excellent high-speed driving performance, long-range performance, and ease of repair and maintenance, because it is 40 percent lighter in weight and uses about 50 percent less parts than those used between Poland and Lithuania and Spain and France. It has passed component fatigue and shock absorption tests assuming cold weather in Siberia of up to 80 degrees Celsius below zero.

“A variable gauge bogie costs about double bogies in general, but it is 1.2 times to 2.8 times more economical when the time and costs consumed in a boundary area are taken into account,” said Dr. Na Hee-seung at the institute, adding, “It is effective for 2,000 km in traveling distance in most cases, which means its economic efficiency can be maximized in Korea, China, Mongolia, the Maritime Province in Russia, etc.”

Mongolia to build railway across Mongolia-China border to transportminerals Mongolia to build railway across Mongolia-China border to transportminerals(0)

Mongolia announced Saturday that it will build an international-standard narrow gauge railroad across its border with China to transport its minerals from the Mongolian Gashuun Sukhait port to China’s Gants Mod port.

Ulan Bator has permitted Erdenes Tavan Tolgoi, a state-owned mining company, to co-invest with Chinese companies and form a joint venture to build and operate the railway linking the two countries’ border ports.

Both sides have agreed that Mongolia owns 17 percent of the venture’s stakes and have the same share of investment. In total, 500,000 US dollars will be invested in the initial phase of construction.

Coal is one of Mongolia’s major mineral exports to China. The mineral-rich inland country made the decision to protect the environment and reduce the transportation cost of the coal, which has largely depended on costly trucks.

Yanbian-Mongolia rail link ‘on track’ to facilitate access Yanbian-Mongolia rail link ‘on track’ to facilitate access(0)

Plans are being drawn up for a railway linking the Yanbian Korean autonomous prefecture inNortheast China’s Jilin province with Mongolia, an official said at the “two sessions” in Beijing.

Yanbian, just north of the border with the Democratic People’s Republic of Korea, can be awindow to the world for the province, “which is a major reason that the prefecture decided toextend its reach into neighboring countries,” said Che Guangtie, director of the area’s congress.

A railway will mean more efficient exchange of goods andresources between the two areas, according to Che, who isalso a delegate to the National People’s Congress.

“It’s a big developing opportunity for both areas, and I have astrong feeling that Mongolia intends to cooperate with us tobuild the railway as soon as possible,” he said.

Yanbian had previously launched a forum that aims to offer aplatform for an exchange of views with Japan, the Republic ofKorea and Russia. Last year, Che said, Mongolia joined thegroup.

“Mongolia showed great interest when we mentioned therailway plan,” he said. “Such willingness… must be helpful toreaching an agreement.”

Che told China Daily that he was determined to conductstudies in Mongolia this year, hoping to learn more about thecountry and its needs, “which is key to reaching anagreement and fulfilling the plan” for a rail link, he added.

Wang Shengjin, who specializes in research of the Northeast Asian economy at Jilin University,said the rail link will be useful for fuel transport and tourism.

“Fuel and resources in the two areas are complementary. Yanbian needs rare metals that areabundant in Mongolia, while Mongolia needs coal from us,” Wang said.

The proposed rail link would offer landlocked Mongolia better and cheaper access to the sea viaHunchun, a city in the prefecture, Wang said.

Zhao Yinan contributed to this story.


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