Foreign Money Invades Mongolia

Hurrying into her cramped office deep within Mongolia’s huge Soviet-era Government House, Parliament member Sanjaasuren Oyun, 46, is flushed with excitement, a smile creasing her usually serious face. She hands papers to her young female assistant and exchanges some quick words in the low guttural murmur of Mongolian. Dressed in a pinstriped suit, with a pearl necklace, hair cropped to a business-like shoulder length, and an iPad tucked under her arm, she turns to a waiting reporter. “Sorry to make you wait,” she says, switching smoothly to English, which she picked up as a student at Cambridge. “It’s an important debate we are having today. We are considering a freeze on new exploration licenses.” Outside, it’s a still-chilly, late-May afternoon in Ulaanbaatar, no sign of green along its potholed dirt roads. But the capital city of about one million people is already being transformed by forces greater than the change of seasons.

A freeze on licenses to explore for minerals is no small matter in Mongolia, a country undergoing a huge resources boom, as miners such as Anglo-Australian giant Rio Tinto and the Chinese-backed Shenhua Group compete for the right to extract coal, copper, gold, molybdenum, and uranium. It is a resource play that is expected to bring a flood of money into the impoverished country over the next decade, centered around huge mining projects such as the Shivee Ovoo and Tavan Tolgoi coal reserves, estimated to be worth $300 billion and $400 billion, respectively, and the copper and gold mine Oyu Tolgoi, worth some $300 billion, according to Quam Asset Management in Hong Kong, which runs a Mongolia-focused investment fund.