Colombia and China are working on plans for a railway connecting the Caribbean sea with the Pacific Ocean that could provide an alternative to the Panama Canal.
“I don’t want to create exaggerated expectations, but it makes a lot of sense … Asia could be the new motor of the global economy,” Colombia’s President Juan Manuel Santos told the Financial Times (FT) (subscription).
China imported 164.83 million tons of coal in 2010, up 30.99% on the previous year. Citibank estimates that China’s net coal imports will reach over 200 million tons this year, due to the nation’s strong demand and high dependence on coal as energy.
Gao Zhengyue, Chinese ambassador to Colombia, told the FT that “Colombia occupies a very important strategic position and we see this country as the entry port to the rest of Latin America.”
Financial Times columnist Jonathan Wheatley wrote Monday that China’s need for coal may be the reason to revive a plan that is older than the Panama Canal itself.
China doesn’t want containers. It wants coal. Colombia is the world’s fifth
biggest producer. It has high quality coal in easily-worked surface mines
close to the Caribbean end of the proposed route. Coal can be carried in
bulk in automated trains – a lot cheaper than loading and unloading
containers (it can also be carried long distances on conveyor belts).
China and India both need vast quantities of thermal coal for power
stations, and coking coal for their steel industries.
Nevertheless, other analysts are skeptical of the economic benefit of a “dry canal” linking both oceans. A shipping executive told the FT newspaper that moving containers onto and off the rail link at either end would probably cost $200 each in addition to $100 fees for the rail transport. In comparison, fees for the canal are around $100 a container.
If realized the “dry canal” will be 137 miles long.