|The Tavan Tolgoi mine in Mongolia|
Courtesy of Wikimedia Commons
During a visit to Poland last week, Mongolian president Tsakhiagiin Elbegdorj called for Polish investment in his country's energy sector, touting Mongolia's record as the fastest-growing economy in the world.
"Poland also has coal reserves and this is an occasion to exchange experiences, use your coal-extraction technology, especially because during socialism, Polish mine experts used to come to Mongolia. We want to refresh our relations and adapt them to to the new times," said Mr Elbegdorj.
That will take some work. In 2011, Polish exports to Mongolia were worth $8 million, a modest sum considering the fact that the Asian country's economy grew by 17.5 percent that year. And since Mongolia's GDP could expand by as much as 23 percent in 2013, according to the IMF, Polish businesses may finally want to take notice.
Polish exports to Mongolia mostly comprise foodstuffs, but there may be room for more. It is no accident that Mr Elbegdorj talked up his country's minerals sector while in Poland - natural resources are driving Mongolia's growth. It's likely Mongolia has its eye on Polish coal mining companies, or on mining giant KGHM, one of the world's largest producers of silver and copper.
The mining industry produces 22 percent of Mongolia's GDP, according to data provided by the Mongolian Ministry of Mining. Minerals make up an 89 percent share of Mongolian exports and they account for 70 percent of tax revenue.
The country has rich mineral deposits, including gold, copper and coal. So far $22 billion has been invested in Mongolia by foreign mining companies, none of which came from Poland.
But this might change soon. "We're ready to provide machinery, build mines and to educate local personnel," said Maciej Kaliski, a director in the mining department of the Ministry of Economy, during Mr Elbegdorj's visit. Also, over 200 companies from Poland and Mongolia took part in a special business forum attended by the Mongolian president.
Time is of the essence
But time is of the essence for those interested in making money in Mongolia, especially in its energy sector.
In 2015, the world's largest coal mine will be opened in Tavan Tolgoi, Mongolia. Its deposits are estimated at 6.4 billion metric tons and could last 400 years. The Mongolian government is currently issuing mining permits to foreign companies.
"If the world's mining giants don't invest in Mongolia in the next two years, it will be impossible for them to become a major player here," Thomas Trappe, advisor to the biggest Mongolian mining consortium, MAK, told the Polish Press Agency.
Mongolian officials plan to use this opportunity to lessen the country's dependency on Russia and China. The country's huge neighbors are its biggest trade partners.
"Mongolia is a democratic country, which has a free-market economy, dominated by private capital. Our neighbors don't have economies based on the same rules," said Ch. Otgochuluu, from the Mongolian Ministry of Mining.
He did admit however, that it was Russia and China's "public companies who invest the most in our mining sector." Maybe that will change soon.
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