The Mongolian parliament has ratified an agreement with China for the joint construction of a new cross-border railway, Gashuunsukhait-Gantsmod, designed for directly exporting coal from the Tavan Tolgoi deposit to China, according to the Mongolian government's website.
The ratification of the agreement will allow for the immediate start of construction of the required infrastructure for the project in the current month. The work is expected to take two years. The Mongolian state-owned company Erdenes Tavantolgoi is taking part in the project, while China Energy and its subsidiaries are involved on the Chinese side.
As reported, with the launch of the new railway, the throughput capacity of Mongolia's dry ports will double, and the average coal export volume will increase from 83 million tonnes to 165 million tonnes per year. Annual revenue from coal sales will increase by $1.5 billion.
The railway will gradually connect the border crossings with China at Shiveekhuren - Sekhe, Khangi - Mandal and Bichigt - Zuun-Khatavch, which will also create conditions for implementing new projects along the railway between the two countries.
COAL DEPENDENCY
The project for constructing the new cross-border railway Gashuunsukhait - Gantsmod began in 2014, but was later frozen, with work only being revitalized in 2024 after the signing of the relevant agreement between the Mongolian and Chinese authorities.
It was expected that the commissioning of the new railway would create an opportunity for increased coal exports from Mongolia to China and would boost the GDP per capita.
As reported, according to analysts from the European Bank for Reconstruction and Development, Mongolia's coal export revenues declined in 2024 due to falling export prices, despite a record-high volume of production.
The country's authorities noted that the average price of coal continued to fall at the beginning of this year. Thus, by the end of January-February, it had reached $78.5 per tonne, which is 36% lower than the price at which the country sold coal a year ago. This, in turn, is affecting the decrease in Mongolia's budget revenues.

Published Date:2025-04-11