Mongolia has run into a snag in its ambitious plan to construct a network of railroads that could deliver the huge amounts of coal produced from its various new mines to foreign markets, with building expected to be delayed due to financing difficulties and bureaucratic stalemates.
According to Reuters, vice-chairman of the Mongolia Railway Authority Purevbaatar Luvsandavag stated that the government has struggled to raise the $50 million necessary to fund several feasibility studies and project designs that were created last year, when the country moved to benefit from its immense natural resources.
“We still don’t have permission from the government to announce an open tender to build the railways, and in general there is still a deadlock when it comes to funding and building infrastructure,” Luvsandavag told the media outlet at the Coal Mongolia conference in Ulan Bator.
The rail project is a part of Mongolia’s efforts to capitalize on a mining boom that could significantly improve the country’s tiny economy within the decade. However, the country has expressed difficulty in monetizing its ample mineral reserves, as it would need to spend billions of dollars to create an appropriate infrastructure that would allow the coal and other minerals to reach consumers efficiently. The government plans to build 5,683 km of railways between China and Russia.
According to the news provider, Mongolia exported 22 million metric tons of coal in 2011, with nearly 100 percent of that sold to China at $25 per ton lower than the international average.
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