Source: Reuters, AFP                       Date: 31 March, 2011

A South Korean consortium led by unlisted Lotte Engineering & Construction has signed a preliminary deal to build a 1,040-km railway line starting from Tavan Tolgoi coking coal deposit. Lotte said in a statement on Friday last week that the project with Mongolian Railway was expected to cost USD3 billion and construction was expected to begin in the first half of 2012. The consortium includes the state-run Korea Rail Network Authority and top builders such as Daewoo Engineering & Construction, and Hyundai Engineering & Construction.

ArcelorMittal, Vale and Xstrata are among six shortlisted bidders vying to develop a part of the mine, which has 1.2 billion tons of coal reserves and could produce 15 million tons annually for more than 30 years. The winning bid is expected to be announced on June 30, according to one of the South Korean bidders.

The railway will link Tavan Tolgoi in the South Gobi Desert and the eastern city of Choibalsan, Lotte added. The five-year project is part of a Mongolian government plan to build 5,500 km of cross-country rail by 2015 to transport mineral resources from its mines.