SouthGobi starts building highway from Ovoot Tolgoi to Mongolia-China border

SouthGobi Resources has started constructing a new paved coal highway from its Ovoot Tolgoi coal project to the Mongolia-China border, the miner said late on Tuesday June 19.

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The highway, which extends from the Ovoot Tolgoi complex to the Shivee Khuren border crossing, will have an intended carrying capacity of more than 20 million tpy of coal upon completion, SouthGobi said.

“The new paved coal highway will significantly increase the safety of coal transportation to the border, reduce dust, and improve efficiency and capacity of coal transportation,” SouthGobi president and ceo Alexander Molyneux said in a statement.

It is unclear when the highway is scheduled for completion as SouthGobi could not be reached at the time of writing.

But the statement noted that SouthGobi had signed a 15-year agreement with Mongolia’s State Property Committee to build and operate the highway.

Mongolian coal is largely being trucked as the landlocked country lacks rail infrastructure.

The Mongolian Mining Company in late 2011 opened its new 245km paved road to the border, which is estimated to have capacity for 18 million tpy of coal, up from the previous limit of 6-7 million tpy on the dirt road, according to a CLSA research.

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