Aspire Mining and its Mongolian rail subsidiary, Northern Railways LLC, have received a study that confirms the Northern Rail Corridor in Mongolia as a competitive rail connection between Northeast China and Europe. The high level study was prepared by global rail logistics consultant TransCare GmbH.
The study confirmed that once complete, the Northern Rail Corridor from Erdenet to Kyzyl will be potentially the quickest and lowest cost rail path for trade between Northeast China and Europe.
The TransCare study looked at potential comparative travel times, distances, costs and existing bottlenecks along alternative rail paths identified by China’s One Belt One Road policy.
Currently around 60% of European/Russian rail transit freight to and from China moves along the route from western China through Kazakhstan to Europe while around 35% travels around Mongolia via the Manchurian route. Only a small proportion travels through Mongolia along the single track Trans-Mongolian Railway.
TransCare confirmed that as of June 2016 there are 1881 China to Europe cargo trains annually in service which transport imports and exports worth US$17 billion.
This should be seen in the context of existing annul bilateral trade between China and the European Union of US$3.5 trillion.
According to a development plan issued by China’s National Development and Reform Commission, it is estimated that by 2020 there will be around 5000 cargo trains running between China and Europe each year, connecting a growing number of cities in China and Europe.
Using a common entry point at Tianjin and exit point at Slawkow in Poland, the Northern Rail Corridor is shorter than the existing routes and a highly competitive service in lead times and costs is feasible.
The study shows that the Northern Rail Corridor, which includes dual tracking the Trans-Mongolian Railway and building new rail lines from Erdenet to Ovoot and on to Kyzyl, will provide a more competitive rail service for container freight than existing routes. Building the corridor adds significant additional freight capacity for Eurasian east-west trade.
The northern corridor follows the Trans-Mongolian Railway to Salkhit and then turns west towards Erdenet and Ovoot, avoiding significant bottlenecks along the Trans-Siberian Railway directly to the north of Mongolia.