Aspire is an exploration and development company focused on discovering and developing world class premium coking (metallurgical) coal deposits in Mongolia.
Aspire Mining Limited (ASX:AKM), announced that its rail subsidiary, Northern Railways, has completed its review of the Erdenet to Ovoot Rail Feasibility Study. Aspire is an exploration and development company focused on discovering and developing world class premium coking (metallurgical) coal deposits in Mongolia.
As quoted from the press release:
Erdenet to Ovoot Feasibility Study Confirms Attractive Economics on Conservative Freight Volumes
- Since receiving the Draft Feasibility study Northern Railways and China Gezhouba International have been jointly discussing various aspects and assumptions used in the Study. While not complete, NR can provide the
- The total construction cost excluding contingencies remains at US$1.25 bn
consistent with the 2017 Primary Feasibility study. An 11 percent reduction in the total
construction cost in RmB is offset by a lower USD: RmB exchange rate.
- The contingency for the construction costs remains at 10 percent. The Rail Feasibility
study will be expanded to take account of the Definitive Environmental Impact
Assessment and management plan to be completed once additional funding is
available to NR.
- Rail tariff of US$3.4c\t\km assumed achieves:
- Project after tax IRR of 8 percent and equity return after tax of 13.6 percent
- Equity NPV after tax at 8 percent of US$276m
- Net cash generated to equity after tax over 30 year period is: US$2.75 Bn
- Cost to use rail from Erdenet to Ovoot is US$18.60\t and is consistent with
- previous estimates and provides for a competitive delivered cost for Ovoot coking coal
- Volume estimates do not include transit freight volumes. No assumptions are made at this point for transit volume, agricultural exports and passenger services.
- Time to construct is modelled out to 60 months. However, NR peer review indicates that 48 months is possible depending on timing of mobilization
The Erdenet to Ovoot Railway will be a transformational project for Mongolia and the Khuvsgul and Bulgan airmags with a US$1.25bn direct investment. Apart from the positive impacts on the local businesses that can benefit from access to a fast, low cost freight service, there is a basis for a long term sustainable new transport service business. A condition of the Erdenet to Ovoot Rail Concession
Agreement is that at least 30 percent of all works must be sub-contracted to Mongolian businesses.
“The delivery of this Feasibility Study is an important step in the development of the Erdenet to Ovoot Railway Project. The anticipated access tariff will allow for a competitive cost of transport for delivery of Aspire’s washed coking coal products into
export markets,” said Aspire’s executive chairman, David Paull.