The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Mongolia on the brink

Government disputes with foreign companies stymie exploitation of rich natural resources.

Mongolia is on the verge of plunging itself into prolonged economic gloom, and its predicament offers telling lessons for external observers about the dangers that arise from the interface between finance and politics.

The country is rich in natural resources: its vast sweeps of plains and rock are rich reserves of coal, iron, uranium, gold and other precious metals. Coal reserves of 175 billion tonnes have been identified.

These and the rest of the country’s natural resources hold the key to Mongolia’s economic future but they remain buried. Politicians wrangle with foreign firms about the manner in which they are to be extracted and what share of the resulting riches belongs to the government.

In late July the tortuous negotiations between the government and Canadian firm Ivanhoe Mines over the Oyu Tolgoi previous metals deposits had been extended once again. The only thing that has been decided is that there ought to be more negotiations. When Euromoney met president Tsakhiagiin Elbegdorj in mid-July he promised a resolution soon. However, foreign investors are dubious. Mining firm BHP Billiton has closed its Mongolia office.

The argument revolves mainly around the Mongolian government’s proposal that it take a 10% to 15% stake in Ivanhoe without investing any capital, and that it receive at least half of the profits generated.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree