Australian firm Leighton Asia has won a $338m contract to build a new freight rail line in the South Gobi region of Mongolia .

The 225km line will extend from Ukhaa Khudag to the international border crossing between Mongolia and China at Gashuun Sukhait.

The line will have an annual capacity of 28 million tons and will carry coal from the southern Mongolian coal fields to China.

The contract, awarded by Mongolian mining firm Energy Resources, includes the rail line’s maintenance for a period of four years.

Construction is expected to begin in March 2010 and finish in mid-2011.