Central Asia, long neglected under the Soviet Union, is now the focus of global attention as superpowers compete for its abundant mineral resources. Among the targets is the tiny nation of Kyrgyzstan, which despite having only 5.5 million people has plentiful supplies of coal, rare earths, and other valuables. But without the infrastructure or technology of its own, the country needs foreign partners.

One thing fueling this energy cooperation is coal. According to Kyrgyzstan's Kabar news agency, coal reserves are over 1 billion tons. Temir Sariev, Kyrgyzstan's minister of economy, said at a press conference in April that the nation can export up to $1 billion coal annually and the Kyrgyz government is planning to increase exports in the coming years. 

"The availability of large reserves of coking coal in the south of Kyrgyzstan was confirmed by research conducted by the Australian company Celsius Coal Limited, which plans to mine up to 1 million tons of coal in Kyrgyzstan annually after it gets a license from the Kyrgyz government and plans to increase it up to 5 million by 2016," says Sariev.

Celsius has announced plan to begin mining coking coal on commercial scale by 2015.

"This Australian company is planning to spend $10 million on exploring the deposits of coking coal in the Uzgen basin," Asanbek Moldokeev, the head of State-owned coal mining enterprise Kyrgyz Komur, told the Global Times.

"The main supply of coking coal is in the Uzgen and Sulyukta coal basins in the south of Kyrgyzstan," Ishinbay Chonoev, director of the State Agency for Geology of Kyrgyzstan, told the Global Times. "The reserves of the two basins are estimated to be as much as 400 million tons in total," he said.

Chinese ambitions

China's Xinjiang Uygur Autonomous Region, which is the starting point of the railway being built through Kyrgyzstan to Uzbekistan, is also interested in being a major consumer of Kyrgyz coal.

Kyrgyzstan's strategy of five years of creation-2017 lays out plans for selling coking coal to China on a huge scale, and the Chinese leadership has expressed interest in importing the solid fuel from Kyrgyzstan.

China's need for coking coal is increasing due to economic growth in Xinjiang, where the volume of steel production in 2015 is planned to reach 35 million tons.

"It is too early to give exact data about Xinjiang's potential to smelt steel, but Kyrgyz-Chinese trade would include the export of coal for Xinjiang too," Jin Yulong, economic advisor at the Chinese embassy in Bishkek, told the Global Times.

China aims to import coal from Kyrgyzstan in order to reduce more than two times the incremental costs to transport coal from other provinces to Xinjiang, the Chinese sources said.

If China starts importing Kyrgyz coking coal, the annual trade volume between the two countries would increase by one third and reach $10 billion, the trade statistics of the two countries show.

Li Quanjun, president of the Chinese Chamber of Commerce in Kyrgyzstan, told the Global Times that there are only two Chinese privately-owned companies trading coal in Kyrgyzstan, but their coal is sold in Kyrgyzstan rather than exported to China.

"Compared with rare minerals, the export of coal to other countries is a less controversial topic in Kyrgyzstan," he noted. "So this is a potential area for future cooperation between companies of China and Kyrgyzstan."

Zhao Gancheng, a senior research fellow with the Shanghai Institute for International Studies, told the Global Times that if China and Kyrgyzstan could ink deals on coal export in the future, this would boost China's relations with Central Asia as a whole.

"Traditionally, China's energy cooperation with countries in the area revolves around gas and oil, and the establishment of coal links will cement such cooperation," he said.

Crucial railway links

But this outlook is only possible in the case of the launch of a railway from Kyrgyzstan to China, Erkin Masadykov, an expert on the China-Kyrgyzstan-Uzbekistan railway project, told the Global Times.

As China and Kyrgyzstan have already begun the implementation of the railway project, Uzbekistan is also interested in the future railway route.

But the prospect of exporting coking coal to China has raised many discussions on various levels in Kyrgyzstan, where the only natural resource currently being mined for export is gold, which sees 15-18 tons sent abroad annually. These discussions are mainly concerned with the future railway routes.

According to Sariev, there are presently two options for railway construction: the first route lying through 300 kilometers of rough and mountainous terrain and the second through areas near major coal fields and settlements, at 390 kilometers. Experts have estimated the cost of the options could be $2.5 billion and $4 billion respectively.

As a consequence of the new opportunities for export, a Chinese company and the Kyrgyz government involved in the railway construction are negotiating the issue of funding sources, while the China Road and Bridge Corporation is finalizing technical and economical groundwork as well as a feasibility study.

One of the chief parts of the project is building a connection between the Chinese city of Kashgar and the town of Kara-Suu on the Kyrgyz-Uzbek border. However, the Kyrgyz government anticipates constructing the branch inside the country to maximize its benefits.

"Therefore, additional calculations are being carried out on the routes to be held near the coalfields," said Masadykov.

"More importantly, if a rail road between China and the region is finalized, the significance and impact would go beyond the energy sector," Zhao said.

But Li stressed that there are also some major challenges and risks for Chinese companies who want to invest in Kyrgyzstan's coal industry.

"Thermal power and steel plants in Xinjiang do have increasing demand for coal, but if China imports coal from neighboring Kyrgyzstan, the cost is not necessarily as low as expected as they have to pay for customs duties and freight charges," he said.

"Besides, there are also some major coal fields discovered in Xinjiang in recent years, so it is hard to say if importing coal from Kyrgyzstan will be economical," he noted.

Li said another factor that could potentially affect such cooperation is political and social stability in Kyrgyzstan.

"Local governments in Kyrgyzstan sometimes easily change their decisions on some issues once they are faced with strong protests from locals," he added.