Mitsubishi Corp and contractor Chiyoda Corp have reached an agreement with the Civil Aviation Authority of Mongolia for the construction of a new airport in the country's capital Ulan Bator.
The airport will be built on the plains that are 50km (31 miles) southwest of the capital. It will have a 33,000m² (355,000ft²) passenger terminal capable of handling 2 million passengers annually and a 3,600m (11,800ft) runway, says Mitsubishi.
Under the deal, the companies also have to secure and put in place equipment such as IT systems and air traffic control systems, which are necessary for the functioning of the airport.
The yen (Y) 50 billion ($493 million) project will take 28 months to build, although 43 months have been set aside for construction as the severity of the Mongolian winters will likely slow down construction efforts.
Mongolia has enjoyed high economic growth in recent years because of its abundant mineral and livestock resources. In 2011, it registered 17% growth in GDP. This has led to a growing number of international passengers passing through the Chinggis Khaan International Airport in Ulan Bator.
Movements at the country's only international airport - Chinggis Khaan International Airport - however have been hindered by its proximity to the mountains and local climactic conditions, Mitsubishi adds.