TMK Energy Ltd is acquiring the remaining 33 percent stake of Talon Energy Ltd in the Gurvantes XXXV Coal Seam Gas Project in the South Gobi Basin of Mongolia for full ownership of the asset.

TMK and Talon have executed a binding heads of agreement in which TMK will retain ownership of Talon’s 33 percent earned interest in the Gurvantes XXXV project via the acquisition of Talon’s wholly owned subsidiary, Talon Energy Pte. Ltd in a stock and cash transaction.

The proposed acquisition remains subject to both Talon and TMK shareholder approval, targeted for late November. The acquisition is subject to all parties obtaining the necessary corporate, governmental, regulatory, and third-party approvals, consents, and waivers. The transaction completion is expected in early December, TMK said in a statement Wednesday.

The consideration for Talon’s earned rights is up to 1.1 billion fully paid ordinary shares in TMK and up to 550 million listed options in TMK on the same terms as that of the TMK options that currently trade under the ticker TMKOB, exercisable at $0.016 (AUD 0.025) on or before April 30, 2026, according to the statement.

TMK currently owns 67 percent of the Gurvantes XXXV project, which covers an area of 3,243 square miles (8,400 square kilometers) and is in what is considered one of the most prospective coal seam gas basins globally, the company said. The project is located near the Chinese-Mongolian border and is close to the extensive Northern China gas transmission and distribution network and to several large-scale mining operations with high energy needs.

Approximately 90.982 million TMK shares and approximately 45.491 million TMK listed options will be retained by Talon, some of which may be distributed to Talon's advisers to satisfy certain transaction costs resulting from the transaction, with the amount to be determined at the sole discretion of the Talon board.

Under the transaction, Talon is to commit up to $545,600 (AUD 850,000) in cash to satisfy Talon’s obligations to contribute to any funding for expenditure or other commitments under Gurvantes XXXV‘s project agreements.

“After extensive discussions and negotiations with Talon, we are pleased to have reached a binding agreement that consolidates 100 percent of the ownership of our flagship asset within TMK”, TMK Energy CEO Brendan Stats said. “Our most recent operations update confirmed that the Gurvantes XXXV Project Pilot Well Program remains firmly on track and is continuing to meet our expectations, with gas rates and water production all pointing towards a successful long-term test result.”

“Consolidating 100 percent ownership under one well-funded ASX [Australian Stock Exchange]-listed entity provides TMK with full control and flexibility to maximize the value of the Gurvantes XXXV Project for the existing TMK shareholders and the new TMK shareholders from Talon. The proposed transaction has been structured in a way that is highly value accretive for existing TMK shareholders through the consolidation of 100 percent of the project with minimal dilution and provides the incoming Talon shareholders with a zero-cost exposure to the enormous potential of the Gurvantes XXXV Project”, Stats added.

TMK’s largest shareholder Tsetsen Zantav, who has a relevant interest of approximately 32.06 percent, has confirmed that he intends to vote in favor of the Transaction at the upcoming TMK shareholder meeting, the company said in the statement, adding that each TMK director is also in favor of the transaction.

To contact the author, email rocky.teodoro@rigzone.com

On the northern outskirts of Choir, capital city of Mongolia's Gobi Soumber Province, a patch of land of about one hectare has been dug with dozens of trenches. These are not ordinary trenches, but are carefully designed to intercept sand and collect snow.

The patch of land is a part of the experimental demonstration zone of about 20 hectares jointly built by Chinese and Mongolian scientists, who have been exploring ways to achieve ecological restoration of desertified grasslands.

Mongolia has been suffering from serious ecological degradation and sandy desertification, as exemplified by frequent sandstorms in winter and spring, which also affect surrounding countries such as China, the Republic of Korea and Japan.

Winter and spring are snowy and windy seasons in Mongolia, and the flat terrain there allows the wind to disperse sand and snow leeward. "We have been using our Chinese experience to help Mongolia block the flow of sand and make better use of snow, a precious water resource," said Li Shengyu, a professor from Xinjiang Institute of Ecology and Geography (XIEG), Chinese Academy of Sciences.

He explained that the method called micro-terrain reshape has also been used in places with similar environmental conditions in China, such as the Inner Mongolia Autonomous Region and the Xinjiang Uygur Autonomous Region.

By digging trenches to a depth of about one meter, and then piling the excavated earth on the sides, an uneven terrain is created. "The rough terrain makes the wind-blown sand and snow flow to accumulate in the trenches, where the snow melts and becomes an important water resource," Li said, adding that they then planted some shrubs and grass in the trenches, which grew well from the sustenance provided by the snowmelt water and sand deposition.

The whole process seems to be simple but the technique lies in the details, said Lei Jiaqiang, a professor at the XIEG.

"For example, we need to adjust the direction of the trenches according to the direction of the wind, and we also need to control the depth of the trenches depending on wind speed. At the same time, the plants planted in the trenches need to be drought-tolerant with high resistance to adversity," Lei added.

Moreover, to prevent the evaporation of the snowmelt water, the Chinese scientists put some new materials in the trenches, such as impermeable sand, a special type of sand that is breathable but does not allow water to permeate.

"We've found that this approach costs less and helps grasslands achieve recovery naturally," Li said.

In addition to this micro-terrain reshape method, Chinese scientists have also applied other techniques to control desertification, such as rapid establishment of protection forests by machine, fly-seeding, enclosing of sandy pastures, and utilisation of the restoration potential of natural ecosystems.

According to statistics from the XIEG, compared with the pre-treatment period, the grassland in the demonstration zone saw a 50 to 208 percent increase in above-ground pasture production, an 88.29 percent reduction in surface sand flux, and a 10 to 45 percent increase in vegetation cover, respectively.

"These positive results prove that this approach has great application prospects, and we hope to promote this model in more areas," said Li.

These cooperation efforts between Mongolian and Chinese scientists have already delivered positive impacts on desertification control and land degradation research, said Akhmadi Khaulenbek, an expert at the Institute of Geography and Geoecology of the Mongolian Academy of Sciences.

"I believe our collaboration will not only positively impact Mongolia, but also other East Asian countries affected by yellow dust storms that originate on the Mongolian plateau. We can solve pressing regional and global issues together and improve the well-being of people," he said.

Desertification is the cancer of Earth, which can spread to other areas, causing environmental and social problems, Lei said.

"The causes of desertification are very complex and are affected by climate change, human activities, geographical environment and so on, and so we need to apply different approaches according to different local conditions," Lei explained.

At present, the XIEG is actively carrying out cooperation on desertification control in Belt and Road Initiative (BRI) participating countries, and has set up several demonstration zones in Central Asia and Africa.

"Desertification governance is closely related to sustainable development and building a community with shared future for mankind. In the future, we can make use of more modern technologies, such as big data, artificial intelligence and the BeiDou system, to achieve harmony between human and aeolian environments," Lei added.

Tourist numbers between Russia, China and Mongolia could be restored to pre-pandemic levels in 2024, Russian Deputy Minister of Economic Development Dmitry Vakhrukov said at a meeting of the three countries' tourism administration chiefs on Tuesday.

"With all Covid restrictions now lifted, we are seeing a gradual restoration of tourist flows, and we hope that next year, after all our current bilateral and trilateral cooperation mechanisms have been further built upon, tourist flows between our countries will return to the pre-pandemic levels," Vakhrukov said at the meeting in Wuhan, China.

Russia is taking measures to stimulate inbound tourism, he said. These include introducing electronic visas from August 1 for nationals of 55 countries, and some 70,000 people have used the mechanism in the two months since, he said. Another mechanism launched on August 1 is visa-free group travel, thanks to which the number of such visa-free exchanges with China has now reached 60,000 trips, Vakhrukov said.

Russia plans to introduce a Tourist Card by the end of year to simplify cashless payments for foreign tourists, he said.

Russia is also developing its tourism infrastructure by supporting the industry in priority areas through building more hotel rooms and new points of attraction, he said.

For his part, Chinese Vice Culture and Tourism Minister Du Jiang proposed forming common tourist brands, integrating tourism with science, technology and other spheres, and improving the trilateral (Russia-China-Mongolia) mechanisms of tourism cooperation. He also invited Russia to take part in a China outbound tourism international exhibition next month.

In the first half of 2023, Chinese citizens made almost 140,000 trips to Russia. This is more than during the entire pandemic. Over the same period, Mongolian citizens made over 115,000 trips. The number of tourist trips to Russia forecast for the whole of 2023 is 360,000 from China and 250,000 from Mongolia.

China’s northern region of Inner Mongolia said on Tuesday it would issue more bonds to repay outstanding debt, while the northwestern province of Qinghai joined a growing number of local governments to issue such bonds as Beijing seeks to reduce debt risks in a wobbly economy.

Inner Mongolia said it would auction three batches of refinancing bonds next Tuesday totalling 40.4 billion yuan ($5.5 billion). It comes after the government raised 66.3 billion yuan by selling such bonds on Monday.

Separately, Qinghai will auction four batches of refinancing bonds next Tuesday totalling 17.2 billion yuan to repay existing debt, with maturities ranging from five to seven years, according to the sales prospectus.

At least seven local governments, which also include Guangxi and Yunan in southwest China, have disclosed plans to issue bonds for debt repayments this year. The proceeds could help ease the debt burden of local government financing vehicles (LGFVs), as Beijing steps up its efforts to reduce debt risks.

LGFVs were set up by Chinese local governments to fund infrastructure investments, and their combined debt has ballooned to roughly $9 trillion, or approximately half the value of China’s entire economy, posing risks as growth falters.

$1 = 7.2971 Chinese yuan renminbi Reporting by Li Gu in Shanghai and Tom Westbrook in Singapore Editing by Mark Potter

Russia, China and Mongolia have signed an agreement on the development of the Great Tea Way tourist route, its geography repeats the trade route from China through Mongolia, Siberia, the Urals and the Volga region to Moscow and St. Petersburg, created in the 18th century for the export of tea. 18 Russian regions from the Trans-Baikal Territory to St. Petersburg are already ready to join the new tourism project.

The document on the development of the new route was signed by Deputy Minister of Economic Development of the Russian Federation Dmitry Vakhrukov, Deputy Minister of Culture and Tourism of the People's Republic of China Du Jiang, Deputy Minister of Environment and Tourism of Mongolia Myagmarzharom Ganbaatar at a trilateral meeting of heads of tourist administrations, which was held in Wuhan (China).

The Great Tea Way will unite the Russian regions of the Far East, Siberia, the Urals, the Volga region, as well as Moscow and St. Petersburg. Within the framework of the route, it is planned to develop, first of all, tourist products in the field of excursion and educational tourism. Strong points along the route will include museums, where commemorative exhibits will be shown, reminiscent of the connection with the tea trade, hotels, places of recreation and entertainment, spas based on the best restoration methods adopted in Russia, China and Mongolia, trading enterprises and restaurants.

"Today we have all the necessary resources to ensure state support for the Great Tea Way project, as well as to create favorable conditions for its implementation. We are actively working with transport authorities, border and customs authorities, and investment companies. 18 Russian regions have already sent their proposals on the content of the Great Tea Way project. They include attractions, local tourist routes, hotels and tour operators interested in implementing the project," said Dmitry Vakhrukov, Deputy Minister of Economic Development of the Russian Federation.

All proposals from the regions will be analyzed by experts of the Ministry of Economic Development, and on their basis, a roadmap will be developed by the end of the year with a set of specific activities and projects for the creation and promotion of the Great Tea Way route.

Please note that this press release is based on materials provided by the company. AK&M Information Agency shall not be held liable for its contents, nor for the legal and other consequences of its publication.

Mongolian circus performers fly through a cavernous hall inspectors have warned could collapse any time, one of the few places left to train if they hope to travel the world with their country's spectacular big top shows.

The decaying, more than a hundred-year-old venue at the Mongolian Circus School is where hundreds of young artists, many now performing at celebrated outfits like Cirque Du Soleil, started their careers.

Defying gravity in a building shaped like a traditional Mongolian ger, the performers practise acrobatics and trapeze, suspended on ropes lashed to the building's dilapidated rafters.

One performer, 18-year-old Uuganbayar Nerguibaatar, said he hopes to follow in his sister's footsteps and take part in international competitions.

"I want to try and become a circus artist," he said.

With paint peeling off the walls and rusty equipment, the building where the artists practice is simply not safe, authorities have warned.

But for the performers, the high-vaulted ceilings provide an ideal space to perfect the daredevil feats that made the Mongolian circus world famous.

"The circus was so popular. We all want to revive it," Gerelbaatar Yunden, a former circus art director, told AFP.

"It is our duty."

- 'Don't have facilities' -

The circus was long one of Mongolia's most popular forms of entertainment, bringing crowds from across the country to see breathtaking shows packed with extreme gymnastics, aerial stunts -- and even wild animals.

Its contortionists -- known as Uran Nugaralt, a practice dating back centuries -- were particularly renowned.

But faced with meagre prospects at home, hundreds of the country's top talents have gone overseas in recent years.

"When we go to international competitions and festivals, we're always asked to train international students," Bolortuya Purevdorj, Dean of the Circus Faculty of the Mongolian Conservatory, told AFP.

"But we politely say we don't have enough teachers or human resources," she said.

"We don't have training facilities."

Performers told AFP they estimated about 85 percent of their colleagues live and work abroad, with at least 400 artists in Turkey as well as 500 contortionists in the United States and Europe.

"Antarctica is perhaps the only place that Mongolian circus performers have not performed," Gerelbaatar told AFP.

- 'Rise again' -

Mongolia's only modern circus venue was built in the Cold War by Romania as a gift to the socialist ally.

The government sold it in 2007 to Dagvadorj Dolgorsuren, Mongolia's first Sumo champion, who was keen to splash his wealth on investments back home.

He renamed it Asa Circus and it was intended to provide a rent-free training facility for circus students.

But it has instead been used for high-profile concerts and events, with fewer and fewer circus acts taking to the stage in years.

That venue was home to the Mongolian Circus School's only training facilities, leaving few options for performers to hone their craft.

The public school -- which has dozens of students and 15 teachers -- now severely lacks training spaces, with a new venue having been under construction for years.

Performers are demanding the government speed things up.

"Once we build a proper circus school facility, (circus art) will succeed," Gerelbaatar, the former circus art director, told AFP.

After that, he said, "the government can expect results and success" and the Mongolian circus can "rise again".

In the meantime, the school has rented a space far away from its headquarters, forcing students to endure long commutes to train.

"There are a lot of problems. Circus is the art of space, but space is very limited here," Bayarchimeg Erdenebayar, a juggling student, said.

"I will keep improving my skills for another year."

- 'Cannot teach everything' -

In light of the privatisation, many contortionists split away from the main Mongolian circus to set up smaller, more specialised schools.

During a visit to one such school, AFP saw students twisting themselves into all sorts of weird and wonderful shapes and sizes, legs held high as heads poked through hips.

But teacher Erdenetsetseg Badarch, who trained as a contortionist under the country's Soviet-backed regime and performed thousands of times on the stage of the Mongolian Circus, said the facilities available are far from enough.

"In order to become a circus artist, we need to learn many other aspects of the art such as costume design, stage speech and body language," she said.

"My little studio cannot teach everything."

Another contortionist teacher there said that despite the obvious talent on display, his hopes for the future were bleak unless the state steps in to help.

"Our own state ignores its talented artists, who deserve better recognition," Bud Tumurbaatar told AFP.

"That's why Mongolian artists are leaving Mongolia for other countries for better treatment and a better income."

The President of Mongolia Khurelsukh Ukhnaa with his spouse L. Bolortsetseg arrived in France for a State Visit on October 10, 2023, at the invitation of the President of the French Republic Emmanuel Macron.

French Minister for Energy Transition Agnès Pannier-Runacher, Ambassador Extraordinary and Plenipotentiary of Mongolia to the French Republic Nyamkhuu Ulambayar, Ambassador Extraordinary and Plenipotentiary of the French Republic to Mongolia Sebastien Surun greeted President Khurelsukh upon his landing at the Paris Orly International Airport.

During the Visit, President Khurelsukh Ukhnaa and President Emmanuel Macron will hold talks and the President of Mongolia Khurelsukh will meet the President of the French Senate Gérard Larcher, and the Mayor of Paris Anne Hidalgo.

The President of Mongolia will open the traveling exhibition "Chinggis Khaan: How the Mongols Changed the World," which will be displayed for six months at the Natural History Museum of Nantes in France. President Khurelsukh will also attend a concert of the Morin Khuur Ensemble of Mongolia at the Royal Opera of Versailles and a French-Mongolian Business Forum.

This year marks the 10th anniversary of President Xi Jinping’s proposal of building a community with a shared future for mankind. China recently released the white paper A Global Community of Shared Future: China’s Proposals and Actions, which elaborates on the connotation and best practices of the concept and allows people from all walks of life and the international community to better understand the far-reaching significance of the concept and the goals of major-country diplomacy with Chinese characteristics.

Ten years ago, when faced with the profound question of the world, history and the times, “What is happening to the world and what should we do?”, President Xi Jinping proposed the concept of a community with a shared future for mankind with the broad strategic vision, outstanding political wisdom and strong sense of responsibility as a leader of a major country and party. He pointed out the right direction for global development at the turning point of history and built a strong consensus for international cooperation at a time of complex changes.

Over the past decade, the concept of a community with a shared future for mankind has been developing, while following the right path amid rising changes and moving forward in the face of crises and challenges, and it has achieved significant results and emerged as a thought that leads the times.

From state visits to multilateral summits, President Xi Jinping has elaborated on this important concept on multiple occasions and helped the international community understand more about the idea. Thus a science-based theoretical system is established that takes an open, inclusive, clean, and beautiful world that enjoys lasting peace, universal security, and common prosperity as the ultimate goal, the common values of humanity as the target, a new type of international relations as the fundamental path, Belt and Road cooperation as the platform for action, and the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative as the important pillars.

The concept of a community with a shared future for mankind has become a key strategy for the global response to major challenges of health, climate change, cybersecurity etc. It has been written into the resolutions of the United Nations General Assembly for six consecutive years and included in resolutions or declarations of multilateral mechanisms many times. The idea has gained understanding and support from the international community, especially from developing countries. As a platform for action for the concept, Belt and Road cooperation is also celebrating its 10th anniversary this year. China has signed cooperation documents with 152 countries and 32 international organizations and set up more than 3,000 cooperation projects.

Data from the World Bank shows that the Belt and Road Initiative will generate USD 1.6 trillion in global revenue every year and help nearly 40 million people get out of poverty by 2030. The turbulent international and regional landscape , resurging Cold War mentality, and increasingly intense bloc confrontation in recent years have wreaked havoc on the world economy. Despite the challenges, China’s economy recovery is making steady progress. In the first half of this year, China’s GDP grew by 5.5%. The World Bank, the OECD, and the IMF all predict that China’s economic growth will exceed 5% in 2023.

China’s independence policy, abundant macro policy tools, and broad market prospects allow the IMF and other institutions to predict that China will contribute more than 30% to global economic growth in 2023 and remain the main engine of future growth. China and Mongolia share geographical proximity, cultural connectivity, and people-to-people sincerity.

The principle of amity, sincerity, mutual benefit and inclusiveness and the policy of forging friendship and partnership with neighboring countries have found their best practices here in Mongolia. The close cooperation and fruitful results of high-level visits, economic and trade exchanges and cultural and people-to-people connectivity open a new chapter of building a community with a shared future for the two countries. A community with a shared future for the two countries benefits from the strategic guidance of the two countries’ leaders. Mongolian President Khurelsuh and Prime Minister Oyun-Erdene reached important consensus with President Xi Jinping during their visits to China, setting the course forward for the two countries.

High level leaders of the two sides built the tree engines that will drive the future of the two countries by seeking greater synergy between the Belt and Road Initiative and the Steppe Road Plan, between the Global Development Initiative and Mongolia’s New Recovery Policy, and between China’s two-step development strategy and Mongolia’s “Vision-2050” long-term development policy. A community with a shared future for the two countries benefits from the close cooperation in economy and trade. The strong mutual complementarity and huge potential for cooperation make China and Mongolia close neighbors and partners that cannot be separated. In 2022, despite the pandemic, the bilateral trade between the two countries reached USD 12.2 billion.

Trade in the first three quarters this year increased by 30% year on year, growing closer to the USD 20 billion goal. Mongolian coal export this year is expected to exceed 5,500 tons to a historic new high. Mongolian estimation shows that, for every 1% of economic growth of China, the export of Mongolia in 6 months to a year will increase by 4% and the GDP by 0.6%. A community with a shared future for the two countries benefits from the people-to-people connectivity. The traditional friendship of the two peoples rolls into the new era with even greater vitality. During the pandemic, the donations of sheep and tea became a story well-told among the public. China and Mongolia strengthened cooperation in response to desertification by setting up the sand stabilization pilot area in Mongolia and the China-Mongolia Desertification Prevention and Control Center, which have become a new example of environmental protection for the two countries.

After the pandemic, the “Years to Visit Mongolia” program attracted flocks of Chinese tourists. The international departure hall of the Erenhot railway port has been busy with all the passengers. It is the BRI that provides 21,000 households in three sums of western Mongolia with stable electricity from China. The man in charge of the grid won the special contribution medal of Mongolia for four consecutive years. The Xinjiang Beixin Road & Bridge Group built a high-quality road stretching from Arvaikheer to Bayankhongor in western Mongolia. The manager of the company’s Mongolian office was awarded the Order of the Polar Star by the President.

China is about to hold the Third Belt and Road Forum for International Cooperation. We are ready to uphold the principle of extensive consultation, joint contribution and shared benefits to push forward the Belt and Road cooperation with Mongolia and build a road of peace, friendship, and prosperity that brings benefits to the world. Over the decade, the successful practices of a community with a shared future for mankind have proved that the historical trend of human development is unstoppable. In a global village where all share the same future and interests, no one can stay immune in crises or resolve all the problems. It is solidarity and cooperation, not the zero-sum game mentality, that bring a better world and welfare to every ordinary person living in this global village.

Ambassador Extraordinary and Plenipotentiary of the People’s Republic of China to Mongolia Shen Minjuan

Mongolian President Ukhnaa Khurelsukh on Tuesday begins a visit to France where he will discuss uranium mining and sign deals on energy and telecommunications, the Mongolian government said in a statement.

The visit, which will last until Saturday, follows a trip to Mongolia by French President Emmanuel Macron in May, during which the two countries pledged to expand ties.

They will also hold talks on Mongolia's rich deposits of uranium, which French nuclear firm Orano is seeking to exploit in a deal yet to be approved by Ulaanbaatar.

A French official told AFP in June the project was estimated at "more than a billion euros" and would "make it possible to extract a significant quantity of uranium" to "reinforce the strategic autonomy" of France.

The Mongolian head of state's visit will also focus on culture, with Khurelsukh to open an exhibition focused on his country's founding leader Genghis Khan at the Nantes History Museum, according to his government.

"The significant progress we will make this week, building on President Macron's visit to Mongolia in May, will leave us in a better place to tackle shared challenges and support Mongolia's long-term development for decades to come," the Mongolian president was quoted as saying in a press release.

Mongolia is pursuing what it calls a "Third Neighbour" strategy, in which it seeks to build closer ties with countries beyond the vast authoritarian powers next door.

Mongolia, a landlocked nation, is grappling with the shrinking space for maneuvering between its two powerful neighbors and is seeking to balance its relations with the West. The Foreign Affairs journal has reviewed its unexpected relation to a "third neighbour", the United States which adopts a strategy of economic engagement with Mongolia with the aim of helping it develop options and leverage in dealing with Russia and China. Caliber.Az reprints this article.

"The visit in early July of Russian Prosecutor General Igor Krasnov to Beijing would have gone largely unnoticed but for an unexpected announcement. Krasnov revealed that he and his Chinese colleagues had discussed the need to counteract the increasing Western influence on their 'inner neighbor,' Mongolia. To this end, Krasnov said, he had already forwarded a proposal to his Mongolian counterpart to help strengthen ties with both China and Russia.

Krasnov’s remarks triggered alarm bells in Mongolia. For the past three decades, Mongolia has tried desperately to keep itself at arm’s length from its two neighbors, in part by exploiting their differences and in part by pursuing closer relations with the West. But now, as China and Russia grow ever closer, Mongolia’s space for maneuvering is rapidly shrinking.

This vast, resource-rich country of just over three million people in the heart of Eurasia still clings to a vision of the more open world that existed for about 30 years after the end of the Cold War. In those decades, Mongolia had a degree of freedom in choosing friends, trading with everyone, and benefiting from the prosperity produced by the rules-based international order. But it now faces many uncertainties in an era of great-power competition and hardening geopolitical divisions. In recent conversations with officials in the capital, Ulaanbaatar, we detected a creeping sense of resignation and fears that any rash move may invite intolerable pressure from Beijing or Moscow and further limits on the country’s ability to act independently.

Mongolia, however, does not have to meekly surrender to life as an appendage of China and Russia. Instead, it could become a model for how the United States approaches Central Asia in the unfolding geostrategic competition with China. The United States should do more to facilitate trade and investment links with Mongolia and signal a long-term commitment to the country through educational and training programs without attempting to portray its involvement as a deliberate strategic ploy to weaken autocracy and promote democracy. For its part, Mongolia must redouble its efforts to reassure foreign investors and to nurture a transparent and predictable economic environment, thus setting an example for other Central Asian countries that face similar dilemmas. In this way, Mongolia and other countries that feel caught between great powers might find that they are not so trapped after all.

Between two giants

Mongolia survived the Cold War by aligning itself closely with the Soviet Union. The West was far away, and a much more dangerous enemy was close by: China. Mongolian leaders feared that China harbored irredentist ambitions. With Sino-Soviet relations in a tailspin since the late 1950s, the best option was to hold tight to the Soviets, who promised to protect Mongolia from Chinese encroachment and to support its economic development.

The end of the Cold War ushered in a sea change. In 1990, Mongolia underwent a democratic revolution. The communists were toppled, and the country has since developed a reasonably stable two-party system. It has also pursued an activist foreign policy, characterized not just by a willingness to engage with China and Russia but also a desire to build close relations with the 'third neighbor'—a loose term used by Mongolian policymakers to describe the collective West and significant players among the countries of the global South. Mongolia seeks to defy geopolitical realities through a forceful and purposeful assertion of its claim to international relevance. It was the third neighbor policy, for instance, that underpinned the country’s decision to support US efforts by sending 1,200 troops to Iraq between 2003 and 2008, close to 6,000 troops to Afghanistan between 2003 and 2021, and over 10,000 peacekeepers to South Sudan in recent years.

When it comes to Mongolia’s economy, however, China and Russia tower over all others. More than 90 percent of Mongolian exports [mainly mineral resources] find their way to China. Russia, for its part, supplies Mongolia with 95 percent of its fuel. Mongolia is also a key conduit of trade between China and Russia. Russia owns half the strategic railroad that crosses Mongolia from north to south. [The other half belongs to the Mongolian government.] In the past year, the railroad saw a surge of Russian traffic as the Kremlin sought to make up for its loss of access to Europe by importing an ever-larger quantity of Chinese goods. In the first half of 2023, 2.4 million tons of goods moved between China and Russia through Mongolia, a 58 percent increase from the same period a year ago.

Poking the bear

And yet these strong commercial ties have not prevented diplomatic frictions. The Kremlin has leaned on Mongolia since Russia’s invasion of Ukraine, which came as a major shock to Mongolian policymakers. Mongolia is not a party to the Collective Security Treaty Organization, a Russian-led regional security alliance made up of six former Soviet republics. But the Kremlin has still tried to press Ulaanbaatar to back Russian President Vladimir Putin’s war. Although they have not lent Russia their support, Mongolian diplomats abstained during the votes for UN General Assembly resolutions that condemned the war in 2022.

Even this ostensible neutrality is not enough for Moscow. Russian officials have accused Mongolia of intending to host US biological warfare labs, much as they have insisted on the purported presence of such labs in Ukraine. Mongolia is pushing back, however. Foreign Minister Battsetseg Batmunkh strenuously denied that such laboratories exist or that there are any plans to set them up. And since the beginning of Russia’s war in Ukraine, Mongolian authorities have welcomed thousands of Russian self-exiles and draft dodgers, many of whom hail from nearby Buryatia, which has linguistic, cultural, and ethnic ties to Mongolia. Just in the fourth quarter of 2022—essentially, in the three months that followed Putin’s call for a partial mobilization of Russian citizens—153,162 Russians visited Mongolia, a greater number than entered Mongolia in any prior calendar year. In the first six months of 2023, over 140,000 Russians entered Mongolia. In August 2023, Putin signed a law to close the escape hatch by setting up a new system for conscripts: they will no longer be allowed to leave Russia if drafted.

Mongolian authorities have also allowed voluble expressions of opposition to Putin’s war within their country. About 80 small-scale anti-Russian demonstrations have taken place in front of the Russian embassy in Ulaanbaatar. Several Mongolian politicians have spoken sharply against the war. Damdinnyam Gongor, a Canadian-educated parliamentarian, raised an antiwar sign during a parliamentary session in March 2022. This act prompted Russian diplomats in Mongolia to demand a meeting with him, which he has refused. In the weeks that followed the Russian invasion, former President Elbegdorj Tsakhia and former Prime Minister Bayar Sanjaa [who hail from rival sides of the Mongolian political spectrum] condemned the Russian invasion and called on Putin to end the war. In September 2022, in a video message that went viral, Elbegdorj called on Russia’s ethnic Mongolians to resist the draft and flee to Mongolia instead.

Iskander Azizov, Moscow’s brusque ambassador in Ulaanbaatar in recent years, has made matters considerably worse. In June 2020, he lambasted Mongolia’s national broadcaster for refusing to air the annual Russian World War II victory parade, a decision that was, in Azizov’s view, evidence that Mongolia was succumbing to Western influence. More recently, in November 2022, Azizov prompted stern words from Enkh-Amgalan Luvsantseren, Mongolia’s education minister, when the former sought to intervene in the appointment of a principal at a local school. Enkh-Amgalan furiously denounced Azizov’s 'rude attempt to meddle in Mongolia’s domestic affairs.' The minister reminded the ambassador: 'I am not a minister of [the Russian province of] Buryatia. I am the minister of sovereign Mongolia.' In January 2023, Russia replaced Azizov, who was sent to Myanmar. The new Russian ambassador in Ulaanbaatar, Aleksei Evsikov, is more discreet and tactful. He is a China expert, a fact that speaks loudly to both Russia’s priorities and Russia’s concerns in Mongolia.

But even with these occasional flare-ups, the Mongolian government understandably does not want to provoke Russia for fear that upsetting Moscow could prompt devastating retaliation: Russia could shut off fuel supplies to Mongolia, which would bring the entire country to a grinding halt. As a senior government official told us, 'What can we do? We cannot defend ourselves. Mongolia has no cards to play!'

In the shadow of China

In Mongolia’s relations with China, a remarkable change has occurred. After decades of fretting about Chinese encroachment, Mongolian officials seem a little less concerned. In recent years, fears of Chinese ambitions translated into a policy that aimed at preventing China from acquiring critical stakes in Mongolia’s natural resources, adhering to the standard Russian width between rails in the construction of railroads, and obstructing Chinese migration. In 2017, during his presidential election campaign, former Mongolian President Battulga Khaltmaa spiced up his campaign rhetoric with invocations of a Chinese menace—once elected, however, he pursued a notably more pragmatic course.

That menace does manifest occasionally in serious disputes. In the wake of the Dalai Lama’s visit to Mongolia in late 2016, Beijing swiftly imposed sweeping economic sanctions on its neighbor. Mongolia promptly capitulated and promised to never allow the Dalai Lama to visit again.

But although it gets easily triggered by certain narrowly defined issues [including Taiwan, Tibet, and its human rights record], Beijing refrains from putting too much pressure on Ulaanbaatar—for now. This benign neglect has benefited the Mongolians, especially as they face a more radical neighbor to the north that is intent on reasserting its waning influence. 'The Chinese are very practical people,' Damdinnyam told us. 'The Russians, by contrast, are arrogant—needlessly arrogant. Arrogant for the sake of being arrogant.'

A less charitable explanation for China’s relative neglect of Mongolia is that Beijing knows that Ulaanbaatar’s space for independent action is already terribly circumscribed. China need not expend a great deal of geopolitical capital on coercing a neighbor so bound to it by hard geographic and economic realities. Policymakers in Mongolia [as across Central Asia] have learned to live in the shadow of China.

Testing ground

As a landlocked country almost entirely dependent on China and Russia, Mongolia may be in a particularly vulnerable spot. But that vulnerability is what makes it a crucial testing ground for Western policies. The same set of policies could be applied across Central Asia to counter both Chinese expansionism and Russian malice.

US officials should not confuse political gestures with the genuine economic statecraft that is so desperately needed. Mongolia has always been desperate for attention, especially from senior US politicians. [The only US president to have ever visited Mongolia was George W. Bush in 2005—and that trip was largely an effort to rally support for the US wars in the Middle East.] It is important, however, not to overemphasize the importance of attention, especially if all Mongolia has to gain from the visits of top-ranking US officials are rote statements regarding the two countries’ shared commitment to democratic values.

For instance, US Undersecretary of State Victoria Nuland’s visit to Ulaanbaatar in April produced little of substance beyond praise for Mongolia’s democratic credentials. During a recent White House meeting with Mongolian Prime Minister Oyun-Erdene Luvsannamsrai, US Vice President Kamala Harris not only talked about Mongolia’s 'reliable democracy' but even found time to situate Mongolia within the broader context of US 'defense and deterrence commitments and our security presence in the region.'

There is no real need for such language. It is a bad time for the United States to attempt to impose its ideological view of the world—one divided between democracies and autocracies, placing the US rivalry with China at the heart of geopolitics—on others. Like many countries in Central Asia, Mongolia does not want to be put in a position of having to choose between China and Russia, on the one hand, and the West, on the other. In Mongolia’s case, making such a choice would be extremely painful if not altogether impossible. Mongolia is too dependent on its two authoritarian neighbors to risk antagonizing them.

The third neighbour

The United States needs a different strategy, one not of grand proclamations but of small steps aimed at giving smaller countries such as Mongolia options. The United States cannot expect Mongolia to decouple from China and Russia, but Washington’s active engagement with the country [including through economic involvement but also educational and training programs] would increase Mongolia’s leverage in dealing with its two difficult neighbors. The aim here should be to help Mongolia survive as a robust democracy that can maintain a precarious neutrality in an increasingly polarized world.

Trade and investment will be an important part of any such strategy. Mongolia has a lot to offer the United States. Of particular interest to US officials and companies may be Mongolia’s rich deposits of rare earths and lithium, resources that have become ever more important as the United States attempts to better insulate its supply chains from China.

Progress has been slow on this front. In June, Mongolia, South Korea, and the United States held their first trilateral 'critical minerals dialogue.' What results from this dialogue remains to be seen. Rare earths were also discussed during Oyun-Erdene’s visit to Washington; according to one US official, the Americans are looking for 'creative ways' to help Mongolia. A source familiar with these matters said that this entails technical assistance in geological prospecting. But further impediments to US investment in Mongolia remain, including the difficulty of processing minerals in Mongolia and, critically, the lack of clarity about how to export these strategic materials from a landlocked country without entering into either China or Russia.

Mongolia has another hurdle to overcome: its own reputation. Mongolia must do more to build a predictable legal framework that would make long-term commitments more attractive for foreign investors. But the country is known for occasionally throwing out investors, as it did in 2009 with the revocation of a uranium mining license held by Khan Resources, a Canadian company. That decision, which many suspect was intended to placate the Russians, who wanted exclusive access to Mongolian uranium, led to years of international litigation between the Canadian firm and the Mongolian state, a battle that Mongolia ultimately lost. Earlier this year, a Mongolian court canceled the permits of another uranium prospecting company that was supported by investment from the Czech Republic. The Czechs are currently threatening legal repercussions.

Such cases serve as reminders of both how easy it is to paint foreign investors as crafty foreigners out to steal Mongolia’s riches and how challenging it then becomes to invite them back because the country cannot do without them. Mongolia can and should redouble its efforts to attract foreign multinationals and thus strengthen the economic underpinnings of the third neighbor policy. Mongolia’s energy infrastructure, in particular, is in dire need of help. An Indian firm is building an oil refinery at Sainshand in the Gobi Desert. Although this refinery will not completely eliminate Mongolia’s dependence on imported Russian fuel, it will make a sizable step in that direction. The arrival of more foreign investment in Mongolia’s energy sector will help weaken Russia’s influence in the country. There is also vast potential for investments in wind and solar power: not only would such investments address the country’s vulnerability to energy blackmail by the Russians, but they could also help Mongolia increase its capability to export electricity to China.

That may seem like a bad thing to US officials, but they must dispense with zero-sum thinking when it comes to understanding Mongolia’s geopolitical position. The United States could make a virtue of necessity and recognize that limited cooperation with China here makes sense. Mongolia desperately needs assistance in mitigating climate change, which remains one of the few areas in which the United States and China may be capable of reaching agreement.

The same logic could apply more broadly to Central Asia, which calls for serious Western attention, not in the form of political or ideological grandstanding or military involvement [here, the mess in Afghanistan has shown Americans what not to do] but in the form of hard-nosed economic engagement that would give regional players more breathing space as they face continued Russian bullying and China’s relentless drive for regional hegemony".

Caliber.Az