Leighton Asia has secured an additional A$195 million deal to its current mining contract with Energy Resources LLC, the owner of the Ukhaa Khudag (UHG) Coal Mine in southern Mongolia.

Under the agreement, Leighton Asia will expand the production capacity at the UHG Coal Mine in Mongolia’s South Gobi region from the current level of 2.5 million tonnes per year to 5 million tonnes per year by December 2010. Coal production at the UHG mine began in March 2009 and is the first large scale coal mine in Mongolia developed and operated to international mining standards and practices. The increase in mine production ups the value of Leighton Asia’s mining contract to A$480 million.
Hamish Tyrwhitt, managing director of Leighton Asia, said the company was now in a position to play a significant role in the development of the Mongolian resources sector.
Leighton Asia has also been awarded a US$338 million contract to build a new freight rail line with the main purpose to better connect Mongolian coal fields to China.
The railway will commence at the Ukhaa Khudag Coal Mine, where Leighton Asia has a six year coal mining contract, and will travel 225 kilometres to the international border crossing between Mongolia and China at Gashuun Sukhait.
It will be designed for an annual capacity of 28 million tonnes of coal per annum. Construction is planned to commence in March 2010 with completion scheduled for mid 2011.