Chinese takeaway: PM Narendra Modi in Mongolia

Discussion in 'Foreign Relations' started by Ray, May 12, 2015.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    One has to exploit the natural resources from wherever it is feasible to ensure that India has a steady growth matrix and Mongolia provides that.

    Strategically, India must assist Mongolia to build its infrastructure and ensure the presence of Indian industry in that country so as to enhance India's image as a partner in the growth of Mongolia.

    India has a strategic and defence cooperation. This requires to be boosted.
     
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  3. no smoking

    no smoking Senior Member Senior Member

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    Before you start to dream about Mongolia's natural resources, you at least need to look at the map.
    There are 2 ways to send resources out of Mongolia, either through Russia, or through China, there is no sea line for Mongolia.
    Russia? They are exporting the same resource of their own. Do you think they would like Mongols to take their customer away?
    China? No problem if India is willing to satisfy her on transportation fee.
     
  4. Ray

    Ray The Chairman Defence Professionals Moderator

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    One does not require the sea alone.

    The minerals can be moved by rail to the Russia seaport in the East and then it can come to India.

    Russia would not mind, since it will get her revenues.
     
  5. no smoking

    no smoking Senior Member Senior Member

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    Well, of course Russia won't mind it if India is willing to pay a fortune for the rail.
    The question is whether India is willing to pay a much higher price for these Mongolian resources.
     
  6. pmaitra

    pmaitra Moderator Moderator

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    Higher price in comparison to what? Is there a cheaper alternative?

    I doubt PRC will allow transit, considering PRC itself is hungry for resources. I am sure the Mongolians would welcome a second customer, so that it is not entirely dependent on imports by PRC.
     
  7. amoy

    amoy Senior Member Senior Member

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    the underlying geopolitics in rail gauge

    Mongolia embraces China with rail to lower costs
    Bloomberg
    Mon, Oct 27, 2014

    Mongolia’s parliament adopted for the first time a rail gauge compatible with China, to ease transport of its second-biggest export, coal, to its largest customer.

    The landlocked nation’s 1,900km rail network was built with help from the Soviet Union last century, as Mongolia looked westward for markets and political support.

    Constructing the 240km railway from the Tavan Tolgoi coal basin using China’s standard gauge is expected to save on transportation costs, and helps draw a line under Mongolia’s historical mistrust of its southern neighbor, now the world’s largest energy consumer.

    The Chinese gauge was adopted for two routes to the border with 84 percent of votes in favor, according to the parliament’s Web site. The passage follows years of discussion.

    With this debate now put to rest, investors are likely feeling a sense of relief, Ulan Bator-based Mongolia Investment Business Group managing director Chris MacDougall said in an e-mail.

    Winners from the change include the operator of projects at Tavan Tolgoi, Mongolia’s largest coal deposit with 6.4 billion tonnes of reserves, including Hong Kong-listed Mongolian Mining Corp and state-owned Erdenes Tavan Tolgoi JSC.

    South Korea’s Samsung C&T Corp was awarded a US$483 million contract in May last year to build the tracks. Securing power and building signaling and maintenance depots is to increase the costs of the project to US$820 million.

    In May, Mongolia Railway, the state-owned company overseeing the line, said construction was slated for completion in late 2016, according to Zorig Alimaa, the head of the project department at the time.

    Using standard gauge rail instead of the broad gauge used elsewhere in the country would reduce the cost of transporting coal to China by US$2 a tonne to US$4 a tonne, Zorig said. Broad gauge adds costs because of the need to unload and reload coal before it reaches China, he said.

    Imperial Russia adopted a gauge of 1,524mm in 1842 for military purposes, as a way to slow down an invasion by rail, but standard gauge, used in China, is 85mm narrower.

    Rail Gauge World
    [​IMG]
     
  8. SADAKHUSH

    SADAKHUSH Senior Member Senior Member

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    Have you heard of the saying "Where there is will there is way"? Trade relations are evolving around the world between the countries and same will happen between Asian giants of suppliers and consumers.
     
    Last edited: May 18, 2015
  9. no smoking

    no smoking Senior Member Senior Member

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    Well, for the matter of fact, there is a cheaper alternative--Russia's resources.

    No, PRC allows transit as long as you are willing to pay for the super high cost.
    Of course Mongolians would like a second customer, but neither Russian, nor Chinese would like a second competitor. And they are the only 2 export route that Mongolian gets.
     
  10. no smoking

    no smoking Senior Member Senior Member

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    Certainly, you can wait until the third route is find. But I doubt that will happen in this century.
     

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