Aspire Mining Limited
ABN: 46 122 417 243
69 Kewdale Rd Welshpool WA 6106
PO Box 1918
Subiaco WA 6904
Tel: (08) 9287 4555 ASX RELEASE
Fax: (08) 9353 6974
Web: www.aspiremininglimited.com Email: [email protected]
For Immediate Release - 31 October, 2016
Northern Rail Corridor Confirmed as a Competitive Rail Connection between NE China and Europe.
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European logistics specialists TransCare GmbH have confirmed that the Northern Rail Corridor, once complete, will be potentially the quickest and lowest cost rail path for European\North East China trade.
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The Erdenet to Ovoot Railway was recently included in the New Northern Rail Economic Corridor connecting China and Russia through Mongolia as part of China's One Belt One Road Policy.
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Confirmation also that extending the Rail network to the Russian city of Kyzyl and the Elegest Coal Basin will provide competitive access to trade with China.
Mongolian metallurgical coal explorer and infrastructure company, Aspire Mining Limited (ASX: AKM, the Company or Aspire), has, through its rail subsidiary Northern Railways LLC ("NR") recently received a high level study from global rail logistics consultant, TransCare GmbH ("TransCare"), looking at potential comparative travel times, distances, costs and existing bottlenecks along alternative rail paths identified by China's One Belt One Road Policy.
Currently:
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around 60% of European\Russian rail transit freight to and from China moves along the route from Western China through Kazakhstan to Europe;
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around 35% travels around Mongolia via the Manchurian route; and
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only a small proportion travels through Mongolia along the single track Trans-Mongolian Railway.
Rail Freight Volumes between China and Europe Set to Explode
TransCare confirmed that as of June 2016 there are 1,881 China to Europe cargo trains annually in service which transport imports and exports worth US$17 bn. This should be seen in the context of existing bilateral trade between China and the European Union of US$3.5 trillion per annum.
According to a development plan issued by China's National Development and Reform Commission, it is estimated that by 2020 there will be around 5,000 cargo trains running between China and Europe annually, connecting a growing number of cities in China and Europe.
"Demand for rail cargo service between China and Europe has exploded in recent years because eit offers an alternative to slower and riskier sea freight and much costlier air cargo." 1
Figure 1: One Belt One Road Rail Routes
As a current example of the commercial benefits of rail, Samsung Electronics recently signed a transport agreement with Russian Rail to rail freight containers from Russia's eastern seaports to Slovakia, Hungary and Poland. This reduces delivery lead times from 35 days (seaborne transport) to 18 days providing Samsung with greater inventory control and immediate and efficient adjustment when product models change.
Northern Rail Line Competitive with other Available Rail Routes for Container Transport
Using a common entry point at Tianjin and exit point at Slawkow in Poland, the Northern Rail Corridor is shorter than the existing routes and a highly competitive service in terms of lead times and costs is feasible.
1 Evaluation Northern Rail Corridor China-Europe - TransCare GmbH October 2016
Figure 2: Container Freight Comparisons from Tianjin to Slawkow.
The study clearly shows that the Northern Rail Corridor, which includes dual tracking the Trans- Mongolian Railway and building new rail lines from Erdenet to Ovoot to Kyzyl, will provide a more competitive rail service for container freight than existing routes. Building the Northern Rail Corridor adds significant additional freight capacity for Eurasian east west trade.
The Northern Rail Corridor follows the Trans-Mongolian Railway to Salkhit and then turns west towards Erdenet and Ovoot, avoiding significant bottlenecks along the Trans-Siberian Railway directly to the north of Mongolia.
Figure 3 : Location of Bottlenecks in the Trans Siberian Railway
Northern Rail Route is the Best Path for Ovoot and Elegest Coking Coal Exports to Europe
The TransCare Study also confirms the distance, time and cost advantages for Elegest Coking Coal exports to China.