The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region
Issue link: https://asiaminer.epubxp.com/i/830355
Volume 14 • Issue 2 | 2017 | ASIA Miner | 31 ASPIRE Mining's Mongolian rail subsidiary Northern Railways LLC has signed two recent agreements that are likely to en- hance the economic potential of the Erdenet to Ovoot Railway, which will form part of the proposed Northern Rail Corridor in Mongolia's north. One MoU was signed with MTGT LLC, the owner of the Huren Chuulut Iron Ore Project, and concerns MTGT's use and involve- ment in the Erdenet to Ovoot Railway. Huren Chuulut is a large iron ore deposit about 50km north- west of the Khuvsgul capital of Moron and 60km north of the approved rail alignment. The project needs rail to Erdenet to be able to connect to customers in China along the Trans Mongo- lian Railway. The MoU covers the sharing of development progress, mutual support in funding activities and the provisional allocation of 5 million tonnes of annual freight capacity as soon as the rail line has been extended to the proposed connection point about two thirds along the total 549km Erdenet to Ovoot Railway. It focuses on sharing information and coordinate planning to lay the groundwork for a formal rail haulage services agreement. Huren Chuulut is potentially the first major user of the railway as it could access the rail line before construction is completed through to Aspire's Ovoot Coking Coal Project. Northern Railways also recently signed an MoU with Ulaanbaatar Railways JSC (UBTZ) to cooperate on a number of matters to prog- ress commercialisation of the Erdenet to Ovoot Railway. The MoU will progress a number of key commercial agreements required to support construction funding of the railway, including the commercial terms upon which railway users can access the UBTZ line to move freight through to end markets in Mongolia, south to China or north to Russia. This would encompass a capacity nomination regime and long- term tariff structures. It is expected that the Erdenet to Ovoot Rail users will become the largest users of UBTZ rail services over time. Commercial agreement will also be needed in respect of UBTZ's traffic management and line maintenance capabilities as well as cooperating on rehabilitation of the Erdenet to Salkhit spur line that connects to the main line. This is a 164km line that has limited capacity availability to absorb the substantially higher capacity that will be required to service Erdenet to Ovoot Railway users. TURQUOISE Hill Resources continues to make good progress with underground development at the Oyu Tolgoi Copper-Gold Project in southern Mongolia. By the end of 2016, the underground project workforce had grown to more than 2000 people with continued growth expected to peak in 2018. Major underground development programs under way include un- derground lateral development, sinking of Shafts 2 and 5, support infrastructure and the convey-to-surface system. Prior to suspending underground construction in August 2013, underground lateral development at Hugo North Lift 1 had ad- vanced approximately 16km off Shaft 1 with a total of 65km of lat- eral development expected to be complete by the first draw bell in mid-2020. At the end of 2016, underground lateral development was ahead of schedule with 1.6 equivalent kilometres completed. A further increase in capability is expected in the second half of 2017 due to the installation of a new 3500 tonne per day crusher, which will replace the existing crusher. In 2016, progress was made on the sinking of Shafts 2 and 5 with final depth for both shafts expected to be reached in 2017. During 2016, Shaft 2 was connected to the underground workings en- abling a second independent means of egress, increased materials delivery capacity and additional ventilation. Shaft 2 activity in 2017 is focused on the fit-out of the 1202 metre level connections to the underground workings before sinking to the final depth of 1284 metres. When completed, Shaft 5 will be dedicated to ventilation thereby increasing the capacity for under- ground activities. Infrastructure needed to support underground development pro- gressed during 2016 in areas such as material handling, including crushing and conveying, ventilation and water handling equipment, power distribution and maintenance and storage facilities. During 2016, the bulk excavation component of the convey-to-sur- face system was completed, followed by the commencement of decline tunnel work in January 2017. This system is the eventual route of the full 95,000 tonne per day underground ore delivery system to the concentrator, however it is not a critical path item for first draw bell. Expected completion of the system is 2022, which will facilitate the ramp-up to full production by 2027. The operating open pit is expected to produce 130,000-160,000 tonnes of copper and 100,000-140,000 ounces of gold in 2017. Good progress with OT underground work The Erdenet to Ovoot Railway will form part of the Northern Rail Corridor in northern Mongolia. Agreements boost Northern Rail economics