As Russia and China vie for access to its minerals, Mongolia has turned to the US as a counterweight. But is its democracy safe?
For most of the last several centuries, Mongolia has been controlled by one of its two superpower neighbours. China ruled Mongolia for more than 200 years, a reign that ended only with the collapse of the Manchu empire in 1911. Just a few years later, a communist government, subservient to the Soviet Union, took over.
So when Mongolia achieved true independence in 1990 as the Soviet Union was collapsing, its new leaders were faced with a quandary, one that remains unresolved today: how best to maintain functional independence sandwiched between China and Russia.
Lately, this question has become even more urgent, as miners have started to unlock Mongolia’s vast mineral wealth. In October 2009, the Mongolian government signed a $5 billion agreement—worth as much as the country’s annual gross domestic product—with international mining companies to exploit the Oyu Tolgoi mine in the southern Gobi Desert, expected to yield a billion pounds of copper and 330,000 ounces of gold every year for at least 35 years. The country also has substantial coal and uranium reserves.
Those prospects have raised the stakes, particularly for China, which is hungry for raw materials to feed its dynamic economy. But it worries Mongolians, who fear that China has irredentist claims on its territory. As a result, Mongolia’s leaders have tried to maintain a delicate balancing act, keeping the Chinese investment they need while staving off political influence from Beijing by courting other international partners.
This is no more in evidence than in a throwback to a key element of 19th-century geopolitical competition: railroads.
The coal mine at Tavan Tolgoi, near the copper-gold Oyu Tolgoi mine in the Gobi near Mongolia’s border with China, is the biggest undeveloped mine in the world, and has drawn the interest of the world’s top mining companies. It’s expected to produce 50 million tons of coal per year when it’s developed.
That will require a new rail line to be built from the mine site to existing railroads and eventually to China, which is expected to consume all, or nearly all, of the coal from Taval Tolgoi. But the nearest existing Mongolian railway is 400 kilometres away.
So a far shorter and cheaper option would be to build a line directly south, to China, about 80 kilometres from the mine. The holding company that now owns Tavan Tolgoi, Energy Resources LLC, plans to build a private rail line along that path and has agreed to a contract with Deutsche Bahn AG, Germany’s state-owned railway, to conduct a feasibility study. Deutsche Bahn has said it plans to start running trains on the line by 2011.
But the Mongolian government has balked at the plans. It worries that connecting the mine to the Chinese rail system and not the Mongolian one would allow China too much effective control over the mine, as well as others in the same area, like Oyu Tolgoi, that are likely to use the rail line if it’s built.
Photo Credit: Uniphoto Press
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John Chan
If Mongolia wants to attract international investments, they have to make their investment environment friendly to the international investments, i.e. allow higher profits for the international investments to make. Insisting on an odd railway gauge definitely is not an international investment friendly requirement. Russian does not have the money or the technology to help Mongolia out of poverty to prosperity.
The best way Mongolian can do to improve their future is to ask China to help them to get rid of that odd railway gauge in their nation all together, globalization is the way to go for the Mongolians.
David Mike
It is disturbing how so many people have a twisted view of history. For instance, some Chinese people are claiming Chinggis khan and Kublai khan were Chinese emperors? Chinggis khan never sat on the Chinese throne nor did he live in walled cities, he lived in his traditional ger until his time of death. Kublai khan was an emperor of China, but he drew on his Mongolian heritage to avoid suspicion from the other khans for being “un-Mongolian” like. Does who claim Ming dynasty overthrew Mongol rule is wrong, the Mongols destroyed themselves through internal strife and years of assimilation into the societies they conquered. The Song dynasty was never strong enough to fight the Mongols, they had no-counter attacks as some claimed. They were terrified to even cross the yellow rive as they had no experience at fighting the nomads unlike their norhtern rival Jin dynasty. The Song was conquered through naval warfare, as soon as the Mongols defeated the Song on the sea and landed, the Song government surrendered. Manchurains were also not Chinese, they were nomads like the Mongolians who after conquering China , became assimilated to the Chinese culture. Mongolia will find more markets through the “third neighbor” policy and ascend the shackles of the corrupt Chinese market.