The State Great Khural of Mongolia ratified the “State Policy on Railway Transportation”for the purpose of establishing unified railway network in June 2010.
Pursuant to the Resolution no. 121 of the Government of Mongolia dated 03 November 2012, stating that railway base infrastructures to be developed within Phase I and Phase II of the “State Policy on Railway Transportation”, granted the special right to build these railway base infrastructures to “Mongolian Railway” State Owned Shareholding Company (“MTZ” SOSC).
New Railway Project is effective and beneficial project for not only sectors of mining and railway but also economy of Mongolia, route from the Tavantolgoi coal deposit to the south and east side to access the overseas market through the territories of People’s Republic of China and Russian Federation and create a new gate of exports.
Under the scope of the New Railway Project, 1800 km railway structure to be build which meets the world standards on the south and east of Mongolia territory. The total required investment is 6-9 billion USD for the construction of the New Railway Project.
Benefits of Project:
Transportation expenses will decrease and competitiveness will risewhen unified railway network establishes to access to the world market through transportation of domestic mining products.
Way of transportation will be accessed environmentally friendly based on the latest researches, surveys and technologies.
Transit corridor will be established linking to Euro Asia. /Ereentsav-Choibalsan-Khuut-Bichigt/
In the railway sector, a thousand fold of work places will be created.
Tavantolgoi-Gashuunsukhait railway project
The State Great Khural of Mongolia approved the State Policy on Railway Transportation by the Resolution no. 32 as specified in the provision 8.1.1 in Law on Railway Transport.
Economic benefits of project:
Supporting the exports of coal and copper, creating an opportunity to transport to the territory and port of China and the third country markets, the mining companies in Mongolia will have an opportunity to compete with low price in the world market through operating of Tavantolgoi-Gashuunsukhait railway line.
Transportation cost of coal export will be at 8 USD per ton in the territory of Mongolia till China, currentroad transportation cost will be decreased from 32 USD to 24 USD, and transportation capacity will up at 30 Mtpa by rail port.
Coal miningsupply in Tavantolgoi mining will be up to 2-3 times.
“Tavantolgoi railway” LLC
“Tavantolgoi railway” LLC is established pursuant to the Resolution no.242 dated 08 August 2018 of Government of Mongolia and Resolution no.12 dated 08 October 2018 of Board of Directors of MTZ by separated concession right to build-operate-transferinfrastructure of Tavantolgoi-Gashuunsukhait railway line which granted to MTZ under Resolution no. 28 of the Government of Mongolia in 2013.
In scope of objective to establish “Tavantolgoi railway” LLC, an agreement is made about conditions of establishment of “Tavantolgoi railway” LLC thatagreed upon preconditions and long-term conditions by mutual consentwith “Erdenes Tavantolgoi” JSC. Following are the conditions below:
Concession right to build-operate-transfer the infrastructure of “Tavantolgoi-Gashuunsukhait” railway infrastructure to be transferred to “Tavantolgoi railway” LLC and appointed its founder. “Erdenes Tavantolgoi” JSC shall invest and sharerates to “Tavantolgoi railway” LLC by tangible and intangible assets in stages. “Tavantolgoi railway” LLC shall befinanced to perform the normal operations the assets from the “Erdenes Tavantolgoi” JSC meant as an investment. “Erdenes Tavantolgoi” JSC shall elect 4 members and “Mongolian railway” SOSC shall elect 3 members for the Board of the Directors of “Tavantolgoi railway” LLC will have 7 members total. Meeting of Board of Directors of “Mongolian railway” SOSC has hold and decided to establish “Tavantolgoi railway” LLC and approved its charter on 08 December 2018.
On 04 December 2018, Board of Directors of “Tavantolgoi railway” LLC appointed a Chief Executive Officer during its meeting. Moreover, the management budget plan for project 2018, 2019, plan for investment, company structure and job positions were approved. “Tavantolgoi railway” LLC has been registered by General Authority for State Registration, received registration certificate and seal and started work at MTZ office. MTZ got evaluated concession to right to Tavantolgoi-Gashuunsukhait route by Property Assessment Company, and assessed value is USD 202 million. The evaluation for railway strip line of is being processed. Zuunbayan-Khangi railway project
This project covers the territories of Ulaanbadrakh, Khuvsgul and Khatanbulag soum of Dornogovi province, Zuunbayan station owned by “Ulaanbaatar Railway”JSC connecting to Mandal port of PRC. Total length of railway infrastructure is 281km.
By developing Zuunbayan-Khangi railway base infrastructure, increasing the competitiveness of Mongolian iron ore and coal and goods turnover and reducing transportation cost to city of Bugat, city of industries in Inner Mongolia, revenue for iron ore exports will be increased to become a way for new railway contribution to economy of Mongolia.
Iron ore export capacity will be increased 2-3 times; Transportation distance will be short and transportation cost per ton will be decreased by 4-8 USD. Railway infrastructure network will be developed for being decreasedloading port of Zamyn-Uud 4.8 million tons of iron ore is explored to export from iron ore mining a year in Yeruu soum, Selenge province by rail transportation through Zamyn-Uud port, Mongolia. Therefore, freight volume can be increased 10 million tons to 13 million tons byincreasing market request. This freight is transported totally 908 km from Sainshand to Bugat through Trans loading facility of Erlian city and route of Jining, Hohhot city in Inner Mongolia Autonomous Region.
If 281 km railway base infrastructure is to be built continued line Sainshand-Zuunbayan in Dornogovi province till Khangi-Mandal port between Mongolia and China, Sainshand-Zuunbayan-Khangi-Mandal-Bugat railway line distance would be at 590 km and nearby 318 km shorter than existing line.
“Erdenes Mongol” JSC and China Railway 20th Bureau signed on MoU on September 27 2018. On October 27-31, the representatives and engineers of Ministry of Road, Transport Development, “Mongolian railway” SOSC, “East railway” LLC and China Railway 20th Bureau have worked for giving opinions according to newly plannedalignment of Tavantolgoi-Zuunbayan and Zuunbayan-Khangi railway line that has made feasibility study by China Railway 20th Bureau group. “Erdenes Tavantolgoi” JSC and China Railway 20th Bureau agreed in advance that the construction of railway project will being started via finance by offtake coal agreement by the Development Bank of China issued from “East railway” LLC and China Railway 20th Bureau group. According to “East railway” LLC’s request, prefeasibility study is made by China Railway 20th Bureau group. It has not officially received nor introduced and approved by the relevant organizations. Khuut-Bichigt railway project
In 2014,the State Great Khural of Mongolia approved resolution no. 64 stating that Khuut-Bichigt railway to be constructed in standard 1435 mm gauge.
To contribute in regional development of three countries by opening transit transport corridor connecting with railway networks of Russian Federation and People’s Republic of China; To create the shortest for transportation corridor connecting Europe and Asia cooperating with our neighbor countries; To modify economic and trade cooperation of regions in three countries; To reciprocity in economy of all the east mining in Mongolia; Project processes:
In the scope of the preparation for the “The Eastern railway corridor- development of the region and the mining” international consultative meeting” conference, the information was received from 12 of 56 special license owners in mineral resources located in Dornod, Sukhbaatar who were issued by official letters. According to data received, mineral resources in region were increased by 703.3 million tons and totally 5.411.8 million tons. Moreover, annual capacity was increased by 24 million tons and totally 46.4 million tons which was defined in a feasibility study.
According to this result, resource news has sent to be implemented into research of feasibility study for Khuut-Bichigt line by official letter to executing party “China railway design corporation” LLC.
A proposal, to establishment of “Khuut industrial complex” by “Baxin railway” Co., Ltd, transmitted to the Minster of Mining and Heavy Industry.
According to the official visit of Prime Minister Mr. Khurelsukh.U to People’s Republic of China, MTZ and “Baxin railway” LLC signed to renewal on MoU on 11 April 2018 that was signed in 2015.
Nariinsukhait-Shiveekhuren railway project
Ministry of Road and Transport Development of Mongolia, “MTZ” SOSC and “MAK” LLC signed on Memorandum of Understanding for construction of Nariinsukhait-Shiveekhuren-Sekhe railway base infrastructure on 21 July 2015, cooperate on conducting a feasibility study, creating construction design and engineering calculation, financing the construction work, railway base infrastructure operation-transfer-own.
Geological, geodesic, archeological and paleontological studies were carried out in 2009. FEED was carried out by Railway Design Institute of Inner Mongolia Autonomous Region in 2009. Advisory team “McKinsey and Company” has carried out prefeasibility study within Phase I and II of the “State policy on Railway Transportation” in 2011. In 2017, Environmental Impact Assessment was carried out by “MAK” LLC and approved by the Ministry of Environment and Tourism. The feasibility study and FEED, carried out in 2009, were renewed by “Mungun zurlug” LLC by request of “MAK” LLC andconfirmed within discussion about it by Science and Technology Council of the Ministry of Road and Transport Development in 2017. “Nariinsukhait railway” LLC was established by and between “MAK” LLC, “Usukh zoos” LLC, “South Gobi sand” LLC and “Chinhua MAK Nariinsukhait” LLC in 2017.
Tavantolgoi-Zuunbayan railway project
Resolution 153 of Government of Mongolia on May 23, 2018 has been approved by the Government of Mongolia to establish a State-owned legal entity "Zuunbayan rail" LLC, a joint venture “MTZ” SOSC and "East railway" LLC. The plan was approved by Deputy Minister of Road and Transport Development of Mongolia to work process in scope of implementing of resolution 2018. The MoU was signed between “Erdenes Mongol” JSC and China Railway 20th Bureau Group on 27 September 2018, The shareholders agreement draft and the statement draft for establishing working group were sent to “East railway” LLC to implement the resolution on 19 October 2018. On 27-31 October, representatives and engineers of relevant to the Ministry of Road and Transport Development, “MTZ” SOSC, “East railway” LLC and China Railway 20th Bureau Group have checked and given proposals along the newly alignment construction that China Railway 20th Bureau Group plans to develop the feasibility study for Tavantolgoi-Zuunbayan and Zuunbayan-Khangi railways base infrastructure. “Erdenes Tavantolgoi” JSC and China Railway 20th Bureau agreed in advance that the construction of railway project will being started via finance in offtake coal agreement by the Development Bank of China issued from “East railway” LLC and China Railway 20th Bureau group. According to “East railway” LLC’s request, prefeasibility study is made by China Railway 20th Bureau group. It has not officially received nor introduced and approved by the relevant organizations.