New railway linking China and Mongolia launched to boost coal trade
View of piles of coal on a wharf in Rizhao, Shandong Province (east China) Photo: cnsphoto
Mongolia launched a 233-kilometer cross-border railway line between the Tavan Tolgoi coalfield and Gashuun Sukhait on the Chinese border this weekend, a move that is expected to boost coal trade between China and Mongolia, officials said. experts.
Mongolian President Ukhnaa Khurelsukh was among dignitaries present at a ceremony marking the launch on September 9, ending a decade-long wait for the crossing, according to an AFP report.
The Tavan Tolgoi Railway has the capacity to export between 30 million and 50 million tonnes of coal to China each year, AFP said, citing Tavantolgoi Railway LLC, the state-owned entity that built the line.
Tavan Tolgoi is rich in coking coal, an essential ingredient in steel making.
The railroad is also expected to reduce the cost of transporting coal to $8 a ton from $32 a ton when coal was delivered by truck, according to the rail authority.
“The launch of the railway service will undoubtedly greatly boost bilateral coal trade and reduce costs,” Lin Boqiang, director of the China Energy Economics Research Center at the University of China, told the Global Times on Monday. Xiamen.
According to Lin, Mongolia’s coal mainly serves the demand of China’s northeast region, predicting that the local coal price will drop significantly with the opening of railway service.
The railway will also increase the country’s coal exports to China, as for years coal has been trucked to China from Mongolia.
According to industry newspaper China Metallurgical News, Mongolia’s coal exports jumped 225.8 percent year on year to 2.36 million tonnes in June, the highest since the start of 2021. Coal exports from the country to China jumped 224.2 percent year-on-year in the month to 2.1 million tonnes, it added.
During State Councilor and Foreign Minister Wang Yi’s visit to Mongolia in early August, China and Mongolia reached broad consensus, including strengthening border cooperation, promoting opening ports and connecting railways and highways wherever possible, to keep industrial and supply chains stable and unimpeded.
The two sides signed the Memorandum of Understanding on the Gants Mod Port Cross-Border Rail Connection Program, which will be important in helping Mongolia expand its openness and achieve strong growth, reads a statement on the official website of Chinese Foreign Ministry on August 8.
The Chinese and Mongolian economies are complementary and have great potential for cooperation, with China possessing a large market, advanced technology and sufficient capital, while Mongolia is home to rich mineral resources.
China has been Mongolia’s largest trading partner and main source of foreign investment for 18 consecutive years. According to data from China’s Ministry of Commerce, bilateral trade volume reached $9.12 billion in 2021, up 35.3 percent year on year.