A railway design and engineering company owned by China Rail Construction, one of China’s three major state-owned rail groups, is teaming up with KWG Resources (CNSX: KWG) to study design and financing options for building a railroad to the junior’s chromite deposits in the remote Ring of Fire area of northern Ontario.
KWG’s agent in China, Golden Share Mining Corp. (TSXV: GSH), facilitated the memorandum of understanding between the two companies, and will assist representatives from FSDI travel to Ontario in early March for initial consultations with First Nations groups and other stakeholders.
“This is in part driven by China’s desire to expand their rail construction industry globally,” says Moe Lavigne, KWG’s vice president exploration and development. China Railway First Survey & Design Institute Group Co. Ltd. (FSDI) has led the design and construction of more than 48,000 km of railways in western China’s rail network, along with more than 5,000 km of high-speed railways and rail transit projects in over 30 Chinese cities, and thousands of kilometres of railway, highway and subway projects overseas.
Set up in the early 1950s, the state-owned enterprise has over 2,000 engineers whose signature projects include the building of a railway from Qinghai to Tibet and from Baotou to Lanzhou. The company is also part of a joint-venture by Chinese rail companies and a U.S. passenger rail company that plans to build a high-speed railway project between Reno in Nevada and Los Angeles, California.
Ultimately, however, KWG’s MOU with the Chinese is all about finance. “We could very easily build a railway using only North American talent, no question about it, but it’s not about the engineering, it’s about the financing,” he says.
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