2nd railway to Mongolia commences construction

China and Mongolia have started building a new cross-border railway line, according to an announcement by China Energy Investment Corp (CHN Energy) on Wednesday, which experts anticipate will be a major route for energy cooperation between the two countries.

The railway's section in China is shouldered by CHN Energy, the country's largest coal-fired power generator by capacity. It is planned to be finished by 2027.

This is the second railway line built between China and Mongolia after the first one that was completed in 1956, it said.

It is 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.

The new railway is expected to carry about 30 million metric tons of cargo each year and will greatly improve connectivity between the two nations. It will help make the movement of minerals and energy resources more efficient, said Wang Shangjun, chairman of the railway company responsible for the project under CHN Energy.

The project is also important for boosting overall economic cooperation and enhancing cooperation under the Belt and Road Initiative, which is aimed at improving infrastructure connectivity and promoting common prosperity, he said.

The new line will connect with China's existing Ganqimaodu-Wanshuiquan railway, which is already operating. This link will join China's rail network with Mongolia's southern railway system.

According to analysts from the European Bank for Reconstruction and Development, Mongolia's coal export revenue declined in 2024 due to falling export prices, despite a record-high production volume.

Analysts believe the railway project is a joint effort between China and Mongolia.

The new railway is a major step for China-Mongolia trade, which will significantly increase the amount of energy and resources traded between the two countries, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

He also pointed out that the railway will improve infrastructure links, boosting overall economic and trade activity in the areas along the railway line.

The project is expected to help upgrade related businesses, such as cross-border logistics, industrial parks near the border, and border trade services, he said.

"Opening a new chapter for China-Mongolia relations, the project will lead to more integrated development and mutually beneficial trade between the two nations."