Mining is a complex issue here in Mongolia. As such, I’ve decided to write a two part series on mining in Mongolia based on my experiences here in country. The first will be on nationalism and how it relates to mining, and the second will be on mining and the impacts on the environment.
No matter how you look at it, Mongolia is a small nation surrounded by giants: Mother Russia to the north, and China to the south. Mongolia has had a long and complicated history with both nations. Most notably, it suffered under the reigns of China, and this has not been forgotten by the greater Mongolian consciousness. The perceived vulnerability, due to small population figures, tends to drive a lot of the decisions by nationalistic groups. They don’t want to see Mongolia under the reigns of another nation, be that literally or metaphorically.
The government has a lot of rules on foreign stakes in mining ventures. The government always has claims in the mines, which frustrates a lot of foreign investors. There are tight restrictions on what percentage can be owned by foreign companies in a single mine. Recently, Oyu Tolgoi, the largest mine in Mongolia that is projected to earn 1/3 of the nation’s GDP this year, shut down because of issues with the government. This sent ripples through the Mongolian economy, devaluing the currency, and causing concern amongst foreign investors.
Mining will be the driving force for Mongolia’s economy, that much is certain. Living in a mining town myself, home to the third largest copper mine in the world, I can see how much life improves in cities with mines. There is quite a bit of wealth going around, both between foreigners and Mongolians, and I can understand the allure (Don’t get me wrong; it’s not all sunshine and rainbows. There are plenty of social issues that come with an influx of wealth). With nationalism on the rise, however, there tends to be a resentment in more radical circles around foreigners reaping the rewards from Mongolian lands. One such nationalist group, the Tsaagan Khass (white swastika), has recently changed its focus to fighting against mining operations on the grounds of protecting the environment. They have also been identified as a terrorist group by the Terrorism Research and Analysis Consortium (TRAC). The move may be to push for a more legitimate recognition for their group, but only time will tell.
Some nationalists use the environment as their main reason for opposing foreigner companies from coming in: They (foreigners) want to destroy Mongolian land for profit. One such nationalist and environmental group fired shots outside of parliament to protest possible revisions to laws that protect headwaters and protected zones from mining. The issues with Mongolia’s environment and mining are vast and rather complicated, and shall be expanded upon in the next post.