25-10-18 How does UBTZ look at the planned Erdenet- Ovoot...

25-10-18
How does UBTZ look at the planned Erdenet- Ovoot railway?
UBTZ will have no direct engagement in its construction but we see real benefits for us from the project. When the railway is ready, a huge amount of additional freight will be required to be carried by UBTZ. If the railway is connected with our Erdenet station, we will raise the transfer capacity of our Erdenet-Darkhan section from its present 8 trains per day. This is there in Upgrading 2030 Programme. It is important to build the Erdenet-Ovoot railway, for when it is ready, Mongolian coal will be able to travel to export points on both the Russian and the Chinese borders.
Will you be finished with your relevant expansion and upgrading work by the time the Erdenet-Ovoot railway is commissioned?
We have made an agreement with Aspire Mining, under which Aspire would be responsible for expansion of our Erdenet-Darkhan section. As for the other work, the project is being delayed, and by the time actual work starts, we should also have made some progress on our own.
The transit transport agreement between Mongolia and Russia was signed in June but no use has yet been made of it. What is holding things up?
Any Mongolian company will get a 66.4 percent discount if it transports coal through Russian territory on Russian Railways. UBTZ is ready to offer some discount to Mongolian coal exporters if they use our line in Mongolia.
How much?
Private entities using certain routes will pay at least 15-20 percent less.
How would the new rates compare with what has to paid now?
Under the discount, transport from Erdenet to Russia’s Nakhodka-Vostochny would cost $30/t in place of the approximately $100/t now – a very big savings. This is, of course, a rough calculation. Apart from $30, UBTZ will charge something like $4/t from Erdenet to the Russian border.

Will UBTZ have a role in the construction of new mining railways? Will Russian companies hold shares in the newly created railways?
I cannot answer on behalf of the Russian companies, except to say that Russia is interested in the development of Mongolia’s railway network, but it won’t be appropriate for me to tell you where they would prefer to be involved. However, I can reveal that Ulaanbaatar Railway is very interested in the construction of the Zuunbayan-Khangi and the Tavantolgoi-Zuunbayan railways, because of their revenue generating potential. If an offer comes and of course, if our General Committee agrees, UBTZ is ready to participate in these two projects.

How about the prospects of Russia exporting its products, especially coal, to China using the northern railway corridor in Mongolia?
Why not, if it is profitable for Mongolia, by getting more custom for UBTZ? No thorough study has been made of transit transport through the northern corridor, and in any case, it will be a political decision for Mongolia.