Sandwiched between Russia and The People’s Republic of China, Mongolia is one of the world’s largest landlocked countries, slightly smaller in area than Alaska, covered mostly by steppes with mountains in the north and the Gobi Desert in the south. The population numbers over two and a half million, most in the capitol of Ulan Bator. The median age of the historically nomadic people is under 25 (you may nevertheless be surprised that popular music there includes rap, techno, and hip-hop). The currency is the tugrik. To quote the NASDAQ Web site (September, 2010), “The country’s reserves of coal, copper, gold and uranium have lately become the talk of the world’s mining industry.”
These natural resources have prompted Mongolia to request proposals from various stock exchanges including NASDAQ with the intent to go international with Oyu Tolgoi. This “Turquoise Hill” mine in the south of the country is said to contain one of biggest deposits of copper and gold in the world, projected to produce 450,000 tons of copper yearly once the complex is in full operation. That translates to over a billion pounds of copper and around 650,000 ounces of gold over the first ten years.
In privatizing its stock exchange, the government also plans to list another mine called Tavan Tolgoi and its untapped resources, said to be the world’s largest but this time in coal-estimated at over six billion tons including coking coal used in the production of steel.
The creation of the Mongolian stock exchange (MSE) in 1991, the world’s smallest by capitalization, followed Mongolia’s Democratic Revolution. The country transitioned from the influence of Soviet socialism to become a parliamentary republic and a market economy in that decade, joining the World Trade Organization in 1997. However, Russia still supplies petroleum and electric power and China remains its primary export partner. According to an encyclopedic background on the Absolute Astronomy Web site, “mining is continuing to rise as a major industry in Mongolia as evidenced by number of Chinese, Russian and Canadian firms opening and starting mining business in Mongolia.”
A report from September 2010 states that Rio Tinto (NYSE:RTP) now holds an approximately 35% stake ($2.5 billion total) in Ivanhoe Mines, an international company vested in Asia Pacific, particularly in the copper and gold of Oyu Tolgoi and coal of SouthGobi Energy Resources. Another report from the Asian Times in 2007 states that “the three main mineral deposits currently set for extraction will eventually generate an annual revenue 10 times the entire value of the Mongolian economy.”
You can get continuing updates on the Web site of UB Post, Mongolia’s Independent English Newspaper.