SouthGobi (HKG:1878) welcomes opening of infrastructure


SouthGobi Resources (HKG:1878) which is focused on exploration and development of its permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region, welcomes opening of expanded border crossing infrastructure.

The company announced that it noted that eight new border gates exclusively for coal transportation opened at the Shivee Khuren-Ceke border crossing on 28 May 2012. The gates will significantly increase the capacity for exportation of coal from Mongolia to China.

Prior to the commencement of the new border crossing infrastructure, all coal transported out of Mongolia at Shivee Khuren-Ceke went through a single crossing gate approximately eight meters wide. Generally, empty trucks would be admitted into Mongolia in the mornings and then loaded trucks could export to China in the afternoons. The new gates create a significant increase in capacity as a number of gates will be available for simultaneous export traffic and two gates will be reserved for inbound arrival of empty trucks such that a constant two-way flow of traffic can be facilitated. At this time, the eight gates will be operated from 8 am to 8 pm six days per week.

"Our daily transportation record for the old border infrastructure was actually achieved last week at 409 trucks – which crossed from Mongolia to China (ie, approximately 37,000 tonnes of coal)," said Alexander Molyneux, president and CEO. "We believe the new infrastructure will eliminate the 'bottleneck' at the border for quite some time. The expanded border crossing should also reduce transportation costs because of more efficient truck utilization for the transport companies."

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