Russia Boosts Mongolia Ties


". . .both countries will shortly conclude an agreement on joint uranium mining."

The Kremlin has reiterated its pledges to implement sizable infrastructure development projects in Mongolia in an attempt to boost bilateral economic ties. Last month, Russian Prime Minister Vladimir Putin visited Mongolia, urging the country to create new major joint ventures and develop agricultural cooperation. He also stated that both countries will shortly conclude an agreement on joint uranium mining.

In response, Prime Minister Sanjaa Bayar said Mongolia also aimed to develop nuclear cooperation with Russia. Bayar proposed speeding up the creation of a bilateral joint venture to mine uranium in Mongolia. He also said that Russian Chief of the General Staff Army-General Nikolai Makarov had recently traveled to the country to discuss military ties, including the modernization of the Mongolian army.

During Putin's visit, five agreements were signed on nuclear, transport and agricultural cooperation.

The most significant deal was clinched by the Russian Railroad (RZD) company. RZD agreed to form a joint venture with Erdenes MGL and the Mongolyn Tomor Zam to upgrade Mongolian railroads and develop the Tavan-Tolgoi coal deposit as well as the Oyu-Tolgoi copper and gold mines. .

On May 13 the RZD chief executive, Vladimir Yakunin, announced that the company had also secured a 50% stake in the Ulaanbaatar Railroad. He said the RZD-led joint project to develop the Mongolian coal and copper mining infrastructure might reach a value of US$7 billion.

The Mongolian government has long promised to support Russian investment in new projects to develop the country's mineral deposits, including Tavan Tolgoi in southern Mongolia. Russian companies have expressed an interest in Mongolia's Tavan Tolgoi coal deposit in southern Gobi region, which has estimated reserves of 5 billion to 6 billion tons. The Oyu Tolgoi field is believed to contain up to 30 million tons of copper and about 32 million ounces of gold.

Russian officials insist that these projects are economically viable. The Russian Energy Minister Sergei Shmatko said Moscow might also consider building power plants in Mongolia, in order to export electricity to China. These plants could be powered using Mongolian coal reserves, he said.

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