Mongolia testing ground for Putin’s global strategy on Mongolia Print E-mail
oyu_tolgoi.jpeg       Prime Minister Vladimir Putin seems to be focusing single-mindedly on the "core business" of Russia Inc.: multi-billion dollar projects in commodities and energy control. The true Russian agenda is most transparent in faraway Mongolia, says a columnist in The Washington Times. Strategically squeezed between China and Russia, it has been dominated by both nations in the past. Today, the pro-American, democratic republic finds itself deluged by visits from senior Russian officials, including Mr. Putin himself.

Mr. Putin jetted into Mongolia just about a month ago. He spent six hours pressing officials for a number of deals in uranium, copper, gold and coal. All these commodities are expected to be in high demand in the neighboring Asian markets. The government-owned Rosatom hopes to grab Mongolia's massive uranium reserves. The key is the railroads, controlled by Moscow since the times of Soviet hegemony there.
Russian Railroads (RZhD), a state-owned mega-company, dominates Mongolian rail through a joint venture. It is offering Mongolia a railway modernization project. Part of the project includes building a new line that would ensure access to natural resources in the Gobi desert and the uranium-rich northeast, boosting Russia's grip on nuclear fuel supplies.
The railroad deal would also give Russia development licenses for two of Mongolia's largest mineral fields: the Tavan Tolgoi coal deposit and the Oyu Tolgoi gold and copper field. The latter is problematic, however. The Mongolian government has already signed a contract promising Oyu Tolgoi to Canadian company Ivanhoe and Rio Tinto, the London-based natural resources giant.
And there's another fly in the ointment. The Mongolian railways are eligible to receive USD300 million for capital improvements from the U.S. government's Millenium Challenge Corp. (MCC). The Russians have ordered the Mongolians to reject MCC funds - lest it comes with strings that might tie up their own plans. The Obama administration faces a difficult choice: to allow the Mongols to redirect the MCC funds to other projects, or cede strategic initiative to Russia.
Russian government-connected companies are preparing other major projects in Mongolia as well. A slew of Russian firms - Alexei Mordashov's Severstal, Oleg Deripaska's Basic Element, Victor Vexelberg's Renova, Alisher Usmanov's Metalloinvest, and state-owned Russian Technologies - a weapons exporter - have their eyes on Oyu Tolgoi and other deposits.
Source: www.news.mn
 
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