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Railway Logistics
Dry Bulk Shipping
The first 25 kilometers of Zunxiao Railway, part of the Tangshan Section, has commenced trial operation following an opening ceremony in April 2010. Construction of the railway is on giong and is targeted for completion by the end of 2016.

When Zunxiao Railway (遵小鐵路) is complete, it will reduce the distance between Tangshan South(唐山南) and Xiaosigou (小寺溝) by over 50%, from approximately 530 kilometers to 215 kilometers. It will also connect with the state-level railway Jincheng Line (錦承線) and Tangzun Line (唐遵線) to form a regional network.

As the railway transport gateway connecting inland and coastal China, as well as northeastern China and northern China, Zunxiao Railway plays a significant role in facilitating the development of the Bohai Rim Economic Zone (環渤海港口經濟帶) and the opening of the country's heartland to foreign investment.

Zunxiao Railway: A Unique Investment
China is one the key drivers in the global economy recovery. The country has recorded an 8.7% increase in gross domestic product (GDP) for the year 2009. This fast economic growth is also reflected in its domestic freight railway business.

According to the Ministry of Railway of the PRC, the annual freight volume has recorded an increase of 1.9% to 3,320 million tonnes in 2009. The main contributor of growth came from freight railway operated by non-government controlled joint-venture railways (非控股合資鐵路), rising to 319 million tonnes for the year, 14% year-on-year increase. In this respect, the Group is well positioned to take advantage of this economic growth with the acquisition of Zunxiao Railway, announced in 2009.

Zunxiao Railway is the first railway project in China that is majority owned by a foreign direct investment. Stretching for 121.7 kilometers across the northeastern part of Hebei Province (河北省), the railway runs across South Zunhua (遵化南) and Xiaosigou (小寺溝), connecting Tangshan City (唐山市) and Chengde City (承德市). It is the first and only railway which connects Tangshan and Chengde, both cities are rich in its natural resources.

Beginning at Zunhua South Station (遵化南站) on Tangzun Line (唐遵線), it passes through five counties and finally links up with the Xiaosigou Station(小寺溝站) on Jincheng Line (錦承線). The project is a key item in the country's Eleventh Five-Year Plan and has been identified as a strategic connection between Caofeidian (曹妃甸) and Chengde City (承德市).

Demand Driven by Large Scale Industrial Production
Areas alongside the Zunxiao Railway are known to be rich in mineral resources including iron ore, vanadium, titanium, gold and manganese, as well as non-metal minerals such as limestone and granite. The vanadium reserves found here ranked second in the country. Other reserves such as titanium ranked sixth and the iron ores were among top three in the country.

Not only is the area rich in mineral resources, it is also home to a number of large scale steel , mineral and construction materials production plants. These manufacturing industries have constituted a huge and steady demand for transportation logistics. Currently, there is a strong reliance on road transport which is both expensive and unreliable when weather turns bad in winter. Relatively speaking, freight railway becomes a more favourable and viable alternative with cost efficiency and reliability being the key benefits.

Note: A subsidiary of Asia Energy Logistics will assist China Oriental Group Company Limited (stock code 581) to construct a cargo site at Santunying Station.
The segment, from the South Zunhua (A) to Santunying (2), has commenced trial operation in April 2010.