Aspire Mining Ltd. unit Northern Railways LLC entered a binding agreement with China Gezhouba Group International Co. Ltd. to complete a rail bankable feasibility study by March 31, 2018.
The memorandum of understanding follows on from a nonbinding agreement between the companies to cooperate on developing the Erdenet-to-Ovoot railways project.
As part of the deal, Northern Railways will look to include Gezhouba, along with China Railways Construction Bureau 20 Group, to jointly work on the design, procurement and construction of the project.
If Gezhouba, owned by state-owned China Energy Engineering Corp. Ltd., is not included, the company will compensate it for the feasibility study-related work.
Gezhouba will also help Northern Railways look for investors for the rail corridor and the Ovoot Coking coal project in Mongolia and help extend the rail corridor to Russia at the Arts Suuri border.
If the funding is secured, Gezhouba will secure a 51% equity interest in Northern Railways during the predevelopment stage, which will dilute below 50% once the project moves into the development phase.