SouthGobi Resources announced earlier this week that construction has commenced on a new paved coal highway to the Mongolia-China border. A ribboncutting ceremony was held June 16, 2012 to commemorate the start of construction. The paved highway will have an intended carrying capacity upon completion in excess of 20Mt/y of coal. On August 2, 2011, the State Property Committee of Mongolia awarded the tender to construct a paved highway from the Ovoot Tolgoi Complex to the Shivee Khuren Border Crossing to consortium partners NTB LLC and SouthGobi Sands, a wholly-owned subsidiary of SouthGobi Resources (together referred to as RDCC).

On October 26, 2011, RDCC signed the concession agreement with the State Property Committee of Mongolia. RDCC now has concluded a 15 year build, operate and transfer agreement under the Mongolian Law on Concessions. “The new paved coal highway will significantly increase the safety of coal transportation to the border, reduce dust, and improve efficiency and capacity of coal transportation” said Alexander Molyneux, President and CEO.

SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia’s South Gobi Region. The company’s flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China. The company plans to supply a wide range of coal products to markets in Asia.