Russia eyes giant Mongolia coal mine as presidents meet

Russian President Vladimir Putin promised significant investment in Mongolia as he met Mongolian counterpart Nambar Enkhbayar amid Russian efforts to win a big coal-mining contract in the neighboring country.

“Our relations are not just being revived but are developing in the most active way… The most important thing for us is the development of economic ties,” Putin said at the Kremlin meeting.

“We are talking about projects in the mining industry, electric power, construction and development of transport infrastructure,” Putin said, adding that Russian investment in Mongolia in the next few years could reach five billion dollars (3.7 billion euros).

A Kremlin official stressed earlier that “major Russian companies” were ready to make big investments in Mongolia, particularly the coal mine of Tavan Tolgoi and the copper and gold reserves of Oyu Tolgoi.

At Friday’s session, Enkhbayar said he had found “full mutual understanding” at the meeting with Putin and that mutual trade between the countries had reached almost 500 million dollars last year.

“We know of the desire of large Russian companies to invest in the Mongolian economy. We know these investments will bring the Mongolian economy not just large sums of money but good technology and development,” Enkhbayar said, speaking in Russian.

The Tavan Tolgoi coalmine is worth at least 300 billion dollars (250 billion euros) and is relatively close to the Chinese border — about 250 kilometres (150 miles) — facilitating exports, the Kommersant daily said earlier.

Mongolian authorities want the project divided up among foreign bidders in a joint venture with the Mongolian state, which would reduce the potential share held by Russian firms, Kommersant said.

Mongolia was once closely allied with the Soviet Union and implemented reforms in the 1990s similar to those in Russia. Mongolia now also has close ties with China and the United States.

Total investment by Russian companies in the Mongolian economy since 1990 amounts to just 45 million dollars (34 million euros), while trade turnover between the two was 466 million dollars last year.