New China - Mongolia railway planned

Germany's state- owned railway company, Deutsche Bahn, is planning to build a 260 km-long railway to transport coal from southern Mongolia to China, said the company in a statement.

Representatives from Deutsche Bahn (DB) and Mongolia-based Energy Resources signed an accord in Berlin this week during a visit by Mongolian Prime Minister Sanjaa Bayar, said the statement.

Construction work will begin later this year, with the total cost of the project estimated to be about US$ 800 million. The first trains are expected to start running by 2011, added DB.

Mongolia is an important transit country between China and Russia and is also assuming an increasingly significant role for rail freight traffic between Asia and Europe.

DB will provide overall project planning, procurement management, monitoring of deadlines and costs, as well as quality assurance as well as management and operational support of the single-line railway, which will be used to transport coal from Ukhaa Khudag in the south of Mongolia to the border crossing at Gashuun Sukhait.

Global mining companies are keen to secure rights to mineral deposits in Mongolia. In January this year, China's state-owned Assets Supervision and Administration Commission announced Shenhua Group, China's largest coal company, was to start construction of a CNY 4.7 billion (US$ 690 million) cross-border railway to transport coal and copper from Mongolia later this year.