Aspire Mining’s ambitious plan to connect its giant Mongolian coking coal deposit to markets in China and Russia has taken a major step forward with the release of a positive feasibility study into the project.

The ASX-listed coking coal developer released the key findings from a draft feasibility study into building a 547km-long railway from its coal deposit at Ovoot to the rail hub town of Erdenet, which is linked to rail routes into China and Russia.

The study found that the nation-building rail project, which will be developed by Aspire’s 80%-owned subsidiary Northern Railways, would be economically attractive even when based on conservative assumptions about freight volumes.

Based on a total construction cost of USD 1.25 billion and a rail tariff of 3.4 cents per tonne per km, the project would deliver an after-tax return on equity of 13.6% according to Aspire management. Net cash generated over a 30-year period would be USD 2.75 billion on an after-tax basis.

Importantly, the tariff structure implies Aspire’s cost to freight its coking coal on the new railway would be USD 18.60 per tonne, which is consistent with previous estimates.

Executive Chairman, David Paull, said: “The Company continues to work with UBTZ Railways JSC to coordinate expansion and construction plans as the central line upgrade and the Erdenet to Ovoot Railway are linked projects. It is also clear that the Mongolian provinces of Khuvsgul and Bulgan will be substantial beneficiaries of this rail project generating a significant amount of new sustainable jobs for this region.”

Over the past year, the Governments of Mongolia and China and even a neighbouring Russian province have all thrown their weight behind Aspire’s railway project, taking development of Aspire’s Ovoot coking coal ever closer to reality.