S. Korea signs $3.0 bn railway deal with Mongolia

SEOUL, March 25, 2011 (AFP) - A South Korean consortium has signed a $3.0 billion preliminary deal to build a railway serving the world's largest untapped coal mine in Mongolia, one of the builders said Friday.

The consortium includes the state-run Korea Rail Network Authority and top builders such as Daewoo Engineering & Construction, Hyundai Engineering & Construction and Lotte Engineering & Construction.

Lotte Engineering said the deal between the consortium and Mongolian Railway was signed in Seoul on Thursday, adding that work is planned to begin next year.

The consortium has offered to build a 1,040-kilometre (650 miles) railway linking Mongolia's Tavan Tolgoi mine in the south Gobi desert with the eastern city of Choibalsan early this month.

Tavan Tolgoi is the biggest untapped coal mine in the world, with about 6.4 billion tons of reserves.

The five-year project is part of a Mongolian government plan to build 5,500 kilometres of cross-country rail by 2015 to transport mineral resources from its mines.

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