Some issues undecided for new railway

Critical decisions are under consideration for rail transportation to strategic deposits

It has become necessary to develop a new railway for transporting mining products, extracted from strategic minerals deposits in Mongolia, to refineries.
The challenges include which direction to build and how to finance the railroads in order to benefit
from exporting to outer markets. For this purpose, Parliament started discussing a draft parliamentary resolution on approving the State Policy for railroad transportation, initiated by the government.
In the first phase, it is believed that products of large minerals deposits including coal, copper, wolfram, zinc and spar from Tavan Tolgoi coal deposit, Tsagaan Suvarga copper
deposit, Aduunchuluun, Chandgana, Talbulag and Khoot deposits will be transported, and the current volume of freight forwarding will be increased by 3.5 fold as a railroad of 1770 km in length is constructed from Tavan Tolgoi- Tsagaan Suvarga- Zuunbayan (400km), Sainshand-Baruun Urt (350km), Baruun Urt-Khoot (290km) and Khoot-Choibalsan (150km).
It is preliminarily estimated that on average, about 50 million tone of mining products will be exported annually from these deposits. This railway route is also believed to create the possibility to export mining products to Russia and other countries
by using Russia’s Far Eastern ports. Furthermore, it is planned to develop infrastructure and urban cites in Omnogobi, Dornogobi, Khentii, Dornod and Sukhbaatar aimags along the railroad. In the second stage, a railroad will be constructed from Nariinsukhait- Shiveehuren (45,5km), Ukhaa Khudag- Gashuunsukhait (267km), Khoot- Tamsagbulag-Nomrog (380km) and
Khoot-Bichigt (200km). Construction of railroads in this direction will enable the opening of a new border check-point with China and improve the capacity of the Sukhbaatar-Zamyn Uud direction. In the third stage, a draft parliamentary resolution stated to urgently plan the construction of a railroad in the western direction, in harmony with deposits to be exploited in the future, its natural formation, regional development policy and population settlement. MPs have different opinions on whether the railroad should have a narrow standard gauge or a wide one. Mongolia’s current 1800 km railway is a wide standard gauge (wider than 1520mm). Russia’s railway is also wide standard gauge while China’s is narrow (narrower than 1435mm).

Due to differences in railway gauges, there will be a problem to transship wagons at border check-points. In the draft resolution worked out by the government, it planned a 1520 mm track for a new railway to be built. It is considered that wide gauge tracks are more significant for economy and national security. For instance, the distance for shipping mining products of Tavan Tolgoi and Oyu Tolgoi deposits through Mongolian territory will be lengthened and profits to remain from shipment in Mongolia will increase; a unified domestic network of railways will be established; a possibility will be created to export products of strategic deposits to many countries without being dependent on one market; there will be an opportunity to supply mining products to markets of other countries by bringing the flow of export, import and transit cargo over Russian and Chinese territory, and it is believed to be the basis of infrastructure and economy to develop the ‘Sainshand’ industrial complex.

In his response to questions by MPs, Road, Transport, Construction and Urban Development Minister Kh. Battulga said, “For landlocked Mongolia, sandwiched between two big states, a gate to world markets is a railway linking to Trans Siberia. It intends to have a gate to the coast through Trans Siberia. To achieve that, we need a railway that rolls on current wide standard gauge.” “We are dependent on China to import 70 percent of all food products. If we give mining products to them, we will be 100 percent dependent. If narrow standard railroad is constructed and minerals are directly exported to China, Mongolia will be unable to gain value-added profits. For this reason, we plan to establish a refinery in Sainshand and ship processed products through the Russian port and Tianjin port. On the other side, Mongolia imports its fuel from Russia. In case Oyu Tolgoi and Tavan Tolgoi deposits begin being exploited, consumption of fuel will increase. Currently, Mongolia’s fuel consumption equals USD 600 million. As a railway is established in the direction of Russia, the matters can be resolved as one,” said the Minister. A 1000km road of the first phase is intended to be constructed within two years. He explained that the Naushka- Ulaanbaatar railroad (410km) was constructed by hand within two years; therefore it is possible to construct because technique are more developed today. China increased its coal export tax by 40 percent and made a decision to not import coal starting from July, 2009. It makes us wary that they may not even receive coal after Mongolia builds a narrow-gauged railroad in the direction of China. Ulaanbaatar Railway’s Transport Department deputy chief Jigjidnyam said that if a railway with narrow standard gauge is constructed, there will be a need to rent locomotives and wagons from China and there is no difference in the expense from constructing a wide standard track in Mongolia and transshipping the cargo. For MPs who have a different opinions from the government proposal, they consider that a railway with a wide standard gauge is backward from world development and the establishment of narrow one is cheaper and has more load-bearing capacity, the transport tariff of China and Russia is much different, it will take much time to construct a long high-cost railway, and there is the probability to ban crude coal in the near future, and they suggest constructing a narrow one in combination. MP Su. Batbold also reminded that Russia’s Premier V. Putin put forward a request to help construct a narrow railway to the Japanese side during his visit to Japan. MP D. Enkhbat proposed that Mongolians need to construct the railroad themselves. “Why can’t we build it ourselves? In the 19th century, Mongolians constructed a railway with spuds and shovels. So it is incorrect to say “we cannot do it” in the 21st century. The two parties holding power say they will provide citizens with jobs. So, they can provide people with right paid jobs by building the railway.” Minister Kh. Battulga said that there is potential to construct the railway ourselves, that training is underway at the Railway Institute, and if this policy is adopted, there will be a possibility to create 3000-4000 jobs in this field. The new railroad will be under 100 percent state-ownership.
Source: The Mongol Messenger newspaper