Kyrgyzstan sets sights on Xinjiang coal market

Kyrgyzstan is aiming to become a major coking coal supplier to the Xinjiang Uygur autonomous region.

But the goal will only be realised if a railway is built to link China to the landlocked and mountainous nation in Central Asia to allow low-cost transport of bulk commodities.

State-owned China Road and Bridge Corporation was completing a feasibility study on a railway that would link China's far-western rail terminus at Kashgar in Xinjiang to the Kyrgyz-Uzbek border town of Kara-Suu, said Kyrgyzstan's Economy Minister, Temir Sariev.

He said one proposed route of 300 kilometres would traverse rugged terrain and cost about US$2.5 billion, while a 390-kilometre alternative would cross valleys and villages and cost over US$4 billion.

The project may be financed by a consortium of state companies from China, Kyrgyzstan and Uzbekistan, or it may be entirely funded and built by China Road and Bridge before being handed over to Kyrgyzstan for operation.

Sariev said the second option was the more likely scenario, and the route would be closer to proposed coal and iron ore mine sites and hence more beneficial to Kyrgyzstan's economy.

But it remains uncertain whether the construction cost of this option will be repaid via a resources-for-infrastructure scheme or other means such as long-term loan repayment.