Controversy of building railroads from Tavan Tolgoi directly to China

Plan of Energy Resources, consortium of Mongolian private companies to build direct rail link from Tavan Tolgoi coal deposit to Gashuun Sukhait, Mongolian-Chinese border point caused controversy in Mongolia. Battulga, Minister of Urban Planning and Infrastructure Development is very critical of this plan and considers the rail should be built and owned by state rather than a private company. The distance from Tavan Tolgoi to Gashuun Sukhait is 245 km.

Government of Mongolia plans to build industrial complex near Sainshand, capital of Dornogovi aimag. According to the plan, the complex will be birth place of heavy industry in Mongolia including chemical. Core of the plan is processing of the Tavan Tolgoi coking coal and building of copper smelter and add value to mineral commodities. The plan have high chance of realization if rail is built from Tavan Tolgoi to Zuunbayar, former military base and oilfield, 45 km away from Sainshand.

Why Zuunbayar, one might ask? Answer is Zuunbayan has rail terminal. From Tavan Tolgoi to Zuunbayan is about 1000 km. Battulga, the minister said “ state must build this road using all its resources as it is of utmost importance to Mongolian economy.Mongolia will add value to its mining commodity and stop shipping coal and copper raw. Thousands of jobs will be created.”
From Zuunbayan, it will be easy to ship any final product to China or any third countries through main railroad of Mongolia-UB Railways.Since UB Railways is 50% owned by Russian Railways, Russian interests are intricately linked to building railroad to Zuunbayan.

Chinese coal giant Shenhua is already building rail link to Gashuun Sukhait border point from Chinese side in anticipation import opportunities.

Mongolian Democratic Party formed working group led by legislator Batbayar Nyamjav to investigate issue of whether to allow building of direct rail link to China (Gashuun Sukhait) by private company (Energy Resources) or support the domestic heavy industrial complex by building railroad to Zuunbayan.The group members are Enkhbold Zandaakhuu, Saikhanbileg Chimed and Gankhuyag Davaajav.
Enkhbold Zandaakhuu, lawmaker of the Democratic Party said “ Direct rail link from Tavan Tolgoi to China will put Mongolia dependent on China. We should strive to have as many trading partners as possible. We want to link Mongolian railroads with development of the mineral resources. We don’t want to have a dead-end rail link just for a private company.”
Odjargal, chair of board of the Energy Resources said this during press conference “ we own just four percent of the Tavan Tolgoi coal deposit. Building direct rail link to China from Tavan Tolgoi will not endanger national security. We have contracted Leighton Asia and Deutche Bahn, reputable companies to build rail link and develop our share of the Tavan Tolgoi.”

Position of the National Security Council on this issue is not clear. Some media reports said the council did not vote on the issue.

By Ganbat, reporter of MonInfo News Service



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