| ULAANBAATAR, Sept 20
ULAANBAATAR, Sept 20 Mongolia will pitch a
number of railway projects to the China-initiated Asian
Infrastructure Investment Bank (AIIB), an adviser to the
government told Reuters, as the crisis-hit nation tries to
attract investment and boost trade.
The landlocked country, wedged between China and Russia, is
mired in debt following a slump in commodity prices, a
precipitous drop in foreign investment and a rapidly declining
currency, forcing the government to hike interest rates and
It sits on vast, untapped mineral wealth but inadequate
transportation infrastructure has held back development, with
several proposed railway projects to ship copper, coal and gold
to China long out of reach because of prohibitive costs and
arguments over security.
But China's "One Belt One Road" project, along with another
initiative to create an "economic corridor" connecting it to
Mongolia and Russia, has provided opportunities for Mongolia to
kickstart new projects, including the expansion of the
Trans-Mongolian railway and construction of a new route going
east, said Yondon Manlaibayar, an adviser to Mongolia's Ministry
of Roads and Transportation Development.
Manlaibayar said Mongolia plans over the next four years to
bolster railway capacity and build new routes that will
eventually connect it to a trading route spanning from China to
"It will go forward," Manlaibayar told Reuters. "We've been
a driving force for the economic corridor," he said.
The corridor agreement signed by Mongolia, China and Russia
in June committed the countries to upgrading regional rail
transport by modernising existing capacity and building new
Mongolia wants to find financing to build 550 km (342 miles)
of new railways, and plans to expand existing routes.
Manlaibayar didn't say how much Mongolia would seek to
borrow to finance the projects, but said preliminary discussions
have already been held with the AIIB. A spokesman for the AIIB
declined to comment when contacted by Reuters on Tuesday.
The plans include the Northern Railway project led by
Australian coal miner Aspire Mining. The China
Development Bank has already expressed interest in providing
three-quarters of the financing needed for the project.
Also on Mongolia's list will be a rail line linking its
Tavan Tolgoi coal mine to the Chinese border. Mongolia has
already invested $200 million, Manlaibayar said, but the project
needs another $800 million.
The Tavan Tolgoi railway project is one of five major
infrastructure projects flagged as priorities by the finance
ministry last week as the country tries to dig itself out of an
Five years ago, foreign investment helped drive Mongolian
growth into double digits, but capital inflows have been on the
decline since 2012 because of disputes with miners and a slump
in commodity prices brought about partly by slowing Chinese
The government has also identified Rio Tinto's
underground expansion of the Oyu Tolgoi
copper-gold mine and the Gatsuurt gold mine owned by Canada's
Centerra Gold as development priorities.
Manlaibayar said he is seeking approval from the government
to launch a road show to get other institutional investors
involved in the railway projects.
"We'll present one-by-one because it's difficult getting all
these investors in one room," Manlaibayar said.
(Additional reporting by Sue-Lin Wong in BEIJING; Editing by
David Stanway and Kim Coghill)