Construction has started on a railway extension that is hoped will ease the transport strain in a plateau salt lake area in west China, one of the country's two key potash fertilizer bases, local officials said Saturday.

The 25.3 km-long rail extension that will link the base of Zangge Potash Co., Ltd in Qaidam basin, Qinghai Province, with the Qinghai-Tibet railway, will have the capacity to carry 3.5 million tonnes of fertilizer each year, officials said.

The rail project, estimated to cost 260 million yuan (41.6 million U.S. dollars), is managed by China Railway First Survey and Design Institute Group Ltd. It is expected to be finished by the end of August.

China widely uses potash fertilizers for farming. In 2011, the country produced 4.7 million tonnes of potash fertilizers but imported another 3.78 million tonnes to meet domestic demand, according to data released by a fertilizer industry association of China.

Qaidam and the Lop Nor in Xinjiang Uygur Autonomous Region are China's two major potash production bases. But both are located in the country's remote and underdeveloped northwestern region.