Source: Frontier Securities                              Date: 31 August, 2011

The construction of nearly 1,800 kilometers of railroad is being planned by government in Mongolia. This is a result of the government's greater attention paid to basic transportation infrastructure. The railroad will connect the Tavan Tolgoi copper and gold project with both the Chinese and Russian borders. A series of paved roads are also near completion.

There are three major routes under construction. The first begins at Tavan Tolgoi, passes through Saisnshand-Khuut and Choibalsan and ends at Khuut-Numrug at the Russian border. That is a total of 1,453 kilometers of track. Another runs 267 kilometers from Gashuunshukhait at the Chinese border to the Tavan Tolgoi site. Finally, a third runs just 46 kilometers from Nariinsukhait at the Chinese border to Shivee Khuren.

According to Minister of Mineral Resources and Energy D. Zorigt, progress has made railroad infrastructure even more critical to government interests. The government recognizes that roads, power, and rail have an effect on employment and growth.

A great deal of construction is also being made for paved roads. Only 10 kilometers remain on the paved road between the Ukhaa Khudag project, Tavan Tolgoi, and Gashuun Sukhait. However, there is some worry that the road may be too narrow for coal trucks. In response, Tavan Tolgoi is planning to build a 12-meter-wide road parallel to Mongolia Mining Corporation's road.

Mongolia Mining Corporation plans to continue to develop regional infrastructure, making the improvement of roads in the area around Ovoot Tolgoi Mine its first priority. SouthGobi

Resources is the member of a consortium given the task of constructing a paved highway from Ovoot Tolgoi to the Chinese border. The consortium intends to construct a road able to transport 20 million tons of coal each year.