The Management and Board of Directors of Erdenes Mongolia LLC, a group of state-owned mining companies, worked at Erdenet Plant and discussed the first half-year 2023 activity report of the plant.

General Director G. Yondon presented the activity report of Erdenet Plant state-owned enterprise for the first half of 2023. He reported on industrial production, basic economic indicators, investment, project implementation, procurement, human resources, social responsibility, occupational health and safety, environment and green development activities.

He also provided detailed information about the implementation of resolutions, decisions and planned indicators of the Government of Mongolia, State Property Policy and Regulation Department, and Erdenes Mongolia LLC.

In the first half of this year, Erdenet Plant fulfilled the plan of the main key indicators of production by 100.0-113.9 percent. Specifically:

• Processed ore 19.5 million tons, 100.0 percent implemenation of the plan,

• Produced 302.7 thousand tons of copper concentrate, 101.6 percent implemenation of the plan,

• Produced 2.97 thousand tons of molybdenum concentrate, 113.9 percent implemenation of the plan.

Although the main production and economic indicators and plans have been implemented in the first half of the year, General Director G. Yondon emphasized in his report that there are many problems related to the current state of Erdenet Plant's operations, construction, investment activities, projects and programs, and proposed solutions, which were submitted to the management team of Erdenes Mongolia. For example:

• Royalty calculation of additional elements of copper and molybdenum concentrate produced by Erdenet Plant creates "unreasonable additional costs",

• Royalty payment is calculated with a large difference,

• Solution of the remaining financing for the extension of the treatment plant,

• Supply the produced energy at a price lower than its cost and buy it at a higher price,

• Difficulties in purchasing relevant equipment in accordance with the technical policy of the factory,

• The contractor of "Urkhaichin-2" District, Urgoo Khaan Construction LLC, failed to fullfil contractual obligations causing detriment to 319 employees who ordered apartments.

During the meeting, CEO of Erdenes Mongolia LLC S. Narantsogt pointed out that the Management and Board of Directors of Erdenes Mongolia LLC will inquire about the first half-year report of Erdenet Plant and the pressing issues that cause difficulties, clarify details, exchange opinions and come up with concrete solutions.

MIAT Mongolian Airlines, the state-owned national airline of Mongolia, and AerCap signed an agreement in May 2023 to lease two 787-9 /Dreamliner/ type aircraft for long-term operation. According to the agreement, the first 787-9 aircraft landed today at Chinggis Khan International Airport.

The second 787-9 aircraft will be received in the first quarter of 2024. The 787-9 is a long-range, wide-body aircraft with full passenger comfort, fuel efficiency, and the latest technological solutions. MIAT ordered 292 passenger seats (30 business, 36 premium, 226 economy).

MIAT plans to fly the aircraft to Frankfurt, Istanbul, and Seoul, and later to the United States.

By spring on central Mongolia’s vast grasslands, the bitter winter snows have largely melted, but strong winds and sandstorms can make this one of the harshest times of the year.

For herder Bayarduuren Zunduikhuu, it is also one of the busiest.

“We wake up as the sun rises,” she says. “Spring is all about the cashmere harvest.”

Like many members of Mongolia’s estimated 300,000 nomadic herder households, Bayarduuren makes much of her income collecting and selling cashmere wool from her free-roaming goats. She combs the animals’ fleeces one by one, teasing out the fine underbelly fibers they molt as the weather warms.

Bayarduuren Zunduikhuu moves home each season looking for land for her herd of 500 animals, including the goats she relies on for cashmere.

Bayarduuren Zunduikhuu moves home each season looking for land for her herd of 500 animals, including the goats she relies on for cashmere.

Dan Hodge/CNN

Prized for its durability and softness, cashmere is used to make luxury sweaters, scarves and blankets. Around 40% of the world’s cashmere comes from Mongolia — roughly 10,000 metric tons in 2021 — according to the United Nations Development Programme (UNDP). Today, cashmere is one of Mongolia’s main exports.

But growing global demand for this luxury wool is taking a toll on the environment and jeopardizing traditional ways of life. As the cashmere market has soared in recent decades, so too has the number of goats grazing on Mongolia’s grasslands. There are now an estimated 27 million of them, meaning they outnumber people in the country by more than eight to one.

Climate change, extreme weather and livestock grazing have combined to leave around 70% of pastureland degraded to some extent, according to the UNDP. This threatens to irreversibly devastate Mongolia’s ecosystems — and the industries that rely on them.

Transparent cashmere

Amid these environmental concerns, some luxury labels are turning to more eco-friendly alternatives. But a new generation of Mongolian designers is looking for ways to make cashmere more sustainable while also supporting local herders.

The process often starts with understanding exactly where — and how — the material is produced, according to Oyuna Tserendorj, who grew up in Mongolia and now runs a cashmere clothing and homeware label.

Goat underhair fibers are spun into yarn, which is then used to make cashmere items such as sweaters and scarves.

Goat underhair fibers are spun into yarn, which is then used to make cashmere items such as sweaters and scarves.

Dan Hodge/CNN

Founded just over 20 years ago, Oyuna is stocked in luxury department stores like Harrods in London and Lane Crawford in Hong Kong. Though she runs her label from London, the designer sources and produces her clothes in her home country.

“We have a very short supply chain. We design our collections, and we work with the factories in Mongolia,” Oyuna says. “And we know which areas and nomadic cooperatives our cashmere comes from.”

Oyuna’s considered approach comes at a premium. While some mass market retailers sell 100% cashmere sweaters for under $80, hers can cost over $1,000.

Luxury labels’ yarn quality, small-batch production and labor-intensive handcrafting processes can account for some of the differences in cost. But sustainable practices also impact garments’ price tags.

Oyuna supports programs the non-profit Sustainable Fiber Alliance (SFA), which helps herders improve their land management, animal welfare and access to the global cashmere market. She only sources from herders that meet SFA’s sustainability standards, even if that means spending more on materials.

Luxury label Oyuna, which specializes in responsibly sourced cashmere, shot a recent campaign on Mongolia's steppe.

Luxury label Oyuna, which specializes in responsibly sourced cashmere, shot a recent campaign on Mongolia's steppe.

Noise Art Media

Making herders’ businesses more profitable may reduce environmental pressures by discouraging overgrazing, according to the UNDP. For instance, processing and manufacturing more cashmere in Mongolia, which currently exports up to 90% of the material raw (long before it becomes yarn, let alone a hat or shawl), could provide them with additional income without the need for more goats. The UNDP suggests that herders could clean and sort the cashmere for local companies directly — and by ensuring their cashmere is not mixed with others, they can also better control the quality and thus charge higher prices.

Yak wool: The new cashmere?

A growing number of labels are looking for ethical alternatives to traditional cashmere. Stella McCartney, for instance, has used only recycled cashmere since 2016. This helps combat waste, with an environmental impact seven times lower than virgin cashmere, the brand says.

Japanese startup Spiber has, meanwhile, developed a spiderweb-inspired synthetic cashmere alternative by fermenting plant-based ingredients into a protein polymer. Athleisure label KD New York has meanwhile produced a fabric with similar qualities to cashmere using soy-based fibers.

These high-tech materials are yet to be widely adopted. But several brands are turning to a readily available cashmere alternative — one that can provide Mongolian herders with an income while protecting their land from degradation: yak wool.

Is yak wool the next cashmere?

01:50 - Source: CNN

Bodios is among the labels betting that yak could be the next big thing. The Ulaanbaatar-based knitwear brand says it produces more than half of its yak wool items — including sweaters, scarves and blankets — in Mongolia.

Yak wool is collected in a similar way to cashmere, as yaks and goats both grow insulating hairs under their woolly fleeces for the winter. The material isn’t as popular as cashmere, in part because the fibers are coarser and darker, making them harder to dye.

But Bodios’ manager Ishbaljir Battulga says that yaks’ grazing habits are kinder on the ecosystem. For example, while goats uproot plants as they eat, yaks only touch the leaves, making it easier for pastures to regrow. They also graze at a higher altitude, meaning they do not contribute to degrading already over-exploited grasslands.

Some experts believe that growing the market for yak wool — also known as yak down — could provide an eco-friendlier source of income for herders in Mongolia. And some Mongolian knitwear-makers are hoping to use material’s comparative rarity (there are fewer than a million yak in Mongolia) as a selling point.

“In terms of softness, the cashmere and the yak down are very close,” Ishbaljir says. “The yak down is warmer … and at the same time, it breathes better.”

Cashmere processing remains relatively rare in Mongolia, which currently exports up to 90% of the material raw.

Cashmere processing remains relatively rare in Mongolia, which currently exports up to 90% of the material raw.

Dan Hodge/CNN

Ulaanbaatar-based boutique studio Hypechase makes yak wool clothing in small batches for its eponymous label, as well as other brands around the world. Founder Adrien de Ville says the material, when left in its natural, undyed colors (which can range from dark brown to gray and white), is gaining popularity among both mainstream and experimental designers, like Antwerp-based Jan-Jan Van Essche.

Less is more?

Despite the growing number of alternatives, global appetite for cashmere clothing continues to swell. Market analyst Grand View Research has estimated that the industry will grow by more than 6% a year until 2030, by which time it will be worth $4.23 billion. But according to Elaine Conkievich, the UNDP’s resident representative in Mongolia, the sector can still grow sustainably if buyers prioritize quality over quantity.

“It’s not about massively increasing the numbers (of garments), but really keeping good quality throughout the value chain, and sustainable practices,” Conkievich says.

Cashmere is prized for its warmth and durability.

Cashmere is prized for its warmth and durability.

Dan Hodge/CNN

“If consumers abroad are looking and saying, ‘OK, this Mongolian sweater, scarf or gloves were produced from beginning to end in Mongolia, it’s benefiting the herder lifestyle and the animal welfare is factored in,’ then that will then bring a higher price.”

How realistic this is, in an age of fast fashion, remains to be seen. For herders like Bayarduuren, however, a more sustainable industry could help her maintain a life on the steppe. It’s something she has previously considered trading in for a job in the city — despite what she describes as a deep connection to nature.

“My parents were herders and I also chose to lead a herder life,” she says. “This way of life has been passed down in my family for generations.”

Mongolia, rich in minerals especially copper and rare earths, but sandwiched between China and Russia, is making a pivotal shift toward a “third neighbor” – the United States. During a recent visit to Washington, Prime Minister Oyun-Erdene Luvsannamsrai aimed to fortify U.S. ties concerning critical minerals and particularly to enhance cooperation in rare earth mining. Additionally, Mongolia and the U.S. brokered an “Open Skies” aviation agreement, intended to bolster direct trade.

Should these agreements be realized and rare earths air-shipped from Mongolia to the United States, what are the implications for China-U.S. strategic competition?

“Chokepoint” Strategy

The China-U.S. relationship has been the world’s most pivotal bilateral dynamic since the end of the Cold War. Recently, competition has taken precedence over cooperation between these two superpowers, with Beijing and Washington jockeying for advantage from trade and technology to control over critical mineral supply chains.

Global supply chains have evolved due to two intertwined factors: advancements in ICT and cross-border logistics, along with the reduction in institutional barriers facilitated by organizations like the WTO. As a result, supply chain management has become crucial for optimizing efficiency, cost-effectiveness, and uninterrupted capital and information flows for both businesses and national economies.

However, supply chains present a paradox: As they grow more complex, weaving in multilayered arrays of suppliers each chosen for their competitive advantages, they also become more vulnerable to external shocks. This includes natural disasters, pandemics, and unpredictable geopolitical shifts. Recent events like the China-U.S. tech war and the economic sanctions on Russia following its invasion of Ukraine highlight the fragility of today’s global supply chains.

In the context of a volatile geopolitical environment, certain chokepoints within supply chains are regarded as potential vulnerabilities. A “chokepoint” denotes a critical and irreplaceable component or link within a supply chain, susceptible to control by potentially adversarial entities. At its core, a chokepoint is characterized by a form of monopoly. While businesses may wield monopolies to achieve heightened economic gains, nations often cultivate them for political objectives. Beyond the establishment of monopolies to create strategic chokepoints, an alternative and more aggressive strategy also exists: targeting an opponent’s chokepoint to intentionally disrupt their crucial supply.

In the competition between the United States and China, both nations are employing chokepoint strategies. To start, the U.S. utilized its dominant position within semiconductor supply chains to exert extensive technological and geopolitical influence. This maneuver effectively curbs China’s progress in advanced chipmaking. China, in response, has implemented its own countermeasures, including export controls of critical metals. These reciprocal actions have transcended the realm of economic sanctions, signifying a broader form of economic warfare between the two powers.

In the midst of these various measures and countermeasures, China holds a wild card: its control over the separation and refinement of rare earths. Presently, China is the sole provider of a continuous, uninterrupted supply of high-energy permanent magnets suitable for high-temperature applications such as electric motors used in EVs.

The Geopolitics of Rare Earths

Rare earths play a crucial role in numerous modern technologies. Specifically, the rapid growth of renewable energy and related technologies, such as electric vehicles, wind and solar energy, spurred a 37 percent increase in rare earths demand in 2022, a trend expected to continue for at least the next five years. Yet, the supply chains for rare earths are mired in geopolitical vulnerability. Notably, China boasts the most substantial natural reserves of all 17 rare earth elements and has cultivated a unique ability to refine and separate each one.

Moreover, since 2012, China has intensified its efforts to move up the value chain. Notably, it has consolidated rare earth mining and processing under state-owned enterprises and established pivotal research centers. Despite commencing patent filings nearly two decades after the United States and Japan, China held more than 80 percent of all rare earth-related patents by 2020.

China is now the largest importer and exporter of rare earths, meaning it controls the bulk of rare earth processing including refinement, separation, and fabricating magnet materials. During the first half of 2023, China imported 90,920 tons of rare earth ores and metals, a substantial portion from the United States, and exported 26,236 tons of refined rare earths, primarily magnet materials. While theoretically feasible, decoupling from China’s rare earth supply chains would involve substantial costs and potentially disruptive supply chain stability.

Beyond just rare earths, China is the leading and most cost-effective supplier of many critical minerals vital for clean energy transition. Given the geopolitical and environmental risks tied to mining and processing minerals, concerns about rare earth supply security have intensified. Recognizing their potential vulnerability to Chinese restrictions, Western governments are actively seeking to level the playing field. This includes seeking to diversify mining sources and building facilities independent of China’s input.

In the face of geopolitical competition between the U.S.-led West and China, more nations, including Mongolia, are gravitating toward the democratic bloc to mitigate risks from China’s dominance in critical supply chains. Reacting to a series of export controls and technology sanctions on semiconductors imposed against it, China has felt compelled to employ reciprocal actions.

For example, Beijing, with precision and deliberation, initially curtailed exports of gallium and germanium – two rare metals integral to the manufacturing of several strategically significant products, including military weapons systems. This move came in the wake of China’s new Foreign Relations Law enacted on July 1, which asserts that the nation may employ countermeasures when facing external restrictions. Moreover, the recent introduction of China’s drone export control policy indicates a potential escalation in these tit-for-tat measures.

In light of China’s countermeasures, the Pentagon is investigating partnerships with U.S. and Canadian companies to recycle rare metals from waste and refine both gallium and germanium. Furthermore, the United States has declared limitations on American investments in China’s tech sector.

Given this backdrop, the Mongolian prime minister’s visit to Washington to discuss potential rare earth collaborations can be seen as bolstering the United States’ position, potentially tipping the balance of power in this geopolitical tug-of-war.

Can Mongolia’s Rare Earths Diplomacy Shift the Power Balance?

The potential rare earth partnership between the United States and Mongolia holds promise for mutual gains. For the U.S., the collaboration could serve to diversify its sources of rare earths. Meanwhile, Mongolia stands to benefit from expanded diplomatic ties and potential U.S. investments that could fuel its economic growth. However, as with any international relationship, the devil is in the details.

Several significant barriers cast shadows over the potential partnership. First, the economic viability of mining rare earths, which come in oxide concentrations ranging from 1 percent to 70 percent, is far from guaranteed. Uncertainties persist regarding the quality of Mongolia’s rare earth reserves and the requisite investment for extraction and processing.

Second, Mongolia may face domestic opposition to rare earths mining operations, which come with a heavy environmental cost. Across its entire value chain, this process consumes substantial energy and water resources while generating various wastes and pollutants, including toxic mining residues, wastewater laden with heavy metals, radioactive waste, and air pollutants such as carbon dioxide and sulfur dioxide. China learned this lesson the hard way: Reports indicate that it could take anywhere from 50 to 100 years for the environment to fully recover in a county in Jiangxi Province where heavy rare earth deposits are rich. The estimated price tag for this restoration is approximately 38 billion yuan, equivalent to around $5.5 billion.

Third, the absence of critical infrastructure in Mongolia, including adequate roads for transporting heavy machinery and reliable electricity, compounds the challenges. Ironically, Mongolia’s best hope for addressing this situation is China. The two countries have agreed to cooperate on a variety of infrastructure projects, including cross-border railways, trade ports, and roads and highways.

Lastly, Mongolia’s landlocked status leaves it reliant on road transport to reach the nearest Chinese ports for global trade. While the “Open Skies” aviation agreement offers an alternative, the cost of air shipping minerals can easily negate any economic benefits. Additionally, the agreement’s implementation depends on the consent of either China or Russia, as their airspace must be crossed for flights to proceed.

Therefore, though bolstered ties between the United States and Mongolia could be disadvantageous for China geopolitically, Mongolia’s pivot seems more symbolic than rooted in economic pragmatism. The potential drawback of this shift is that it could jeopardize the existing cooperation between China and Mongolia. China remains the most significant destination for Mongolia’s mineral exports, including copper and coal. Should Mongolia decisively tilt toward the West, Mongolia’s exports could face constraints.

Conclusion

As China-U.S. tensions escalate, other countries often feel pressured to align with one of these superpowers. Smaller countries have less weight in shifting the China-U.S. dynamic than larger ones, and nevertheless their decisions reflect shared geopolitical anxieties. As pointed out by Oyun-Erdene, countries like his own could suffer greatly if superpower competition boiled over.

In the race against time to combat climate change, global unity rather than fragmentation is the need of the hour.

GUEST AUTHOR

Marina Yue Zhang

Dr. Marina Yue Zhang is an associate professor at the Australia-China Relations Institute, University of Technology Sydney (UTS: ACRI). Marina is the author of three books, including “Demystifying China's Innovation Machine: Chaotic Order,” co-authored with Mark Dodgson and David Gann (Oxford University Press, 2022).

Barkhas Buyandavaa would rather be working anywhere else. Shirtless and covered in black dust, he is trying to fix his 42-wheeler truck by the roadside in the middle of the southern Govi steppe in eastern Mongolia.

“I know coal is bad, but I have no choice. This is the only way to earn a decent living,” said the independent trucker, who transports coking coal on contract for a mining company.

If he were working elsewhere, he would earn three to four times less than he does now.

“I am only working to save some money to go abroad, and then I will quit,” the 32-year-old said. “Most likely Europe.”

Since 1990, Mongolia has transformed from a Soviet Union-style communist state into a vibrant democracy, tripling its GDP per capita and reducing poverty by more than half, largely thanks to agriculture, livestock and mineral resources.

While the world is cutting down on coal – the most polluting fossil fuel and the single largest source of global carbon emissions – Mongolia is ramping up production.

Mongolia produced 32.3 million metric tonnes in 2021. Last year, it increased by 22%, catching up with its pre-COVID-19 levels, the World Bank said in April.

Coal provides more than 90% of land-locked Mongolia’s electricity demand, among the highest proportions in the world, according to energy research organization Ember. It also accounts for 30% of its exports.

Government officials have been vocal about their need to use “this window of opportunity … to be able to export as much coal as we can,” then-Deputy Mining Minister Batnairamdal Otgonshar said last year.

Even the country’s environment minister says the country needs coal for the next five to 10 years.

“As you know, due to the Ukraine-Russia war, the natural gas prices have increased … and even countries like Germany have gone back to the use of coal,” Bat-ulzii Bat-Erdene told RFA.

“Mongolia is completely dependent on coal for income and heating solutions in the winter. Fully phasing out coal is almost impossible in the near future.”

‘Mine-Golia’

Mongolia shares a 4,700 kilometer-long (nearly 3,000-mile) border with China, which is the world leader in renewable energy but burns more coal than the rest of the world combined. It consumed an all-time-high 4.5 billion metric tonnes of coal in 2022, and is set to burn more in 2023.

Customs data show that Mongolia’s coal exports jumped 135% to $6.5 billion in 2022 and 94% of that went to China.

Chinese leader Xi Jinping made clear in July that China would reduce emissions at its own pace and would not be influenced by external factors. It aims for emissions to peak in 2023 before slowing down to reach net zero by 2060.

In the meantime, Mongolia - dubbed “Mine-Golia” - is primed to meet a growing demand. The vast country has proven coal reserves of 33.27 billion metric tons - equivalent to about one-thousandth of annual production.

Some 5% of its landmass is covered by more than 2,700 valid mining licenses. It is one of the few countries in the world which still has large coal power projects in the pipeline.

According to various government and private business estimates, its exports could reach 70 million metric tons annually by 2025.

Mongolia plans to establish more round-the-clock border checkpoints and transportation links to China to facilitate more exports. It recently opened a 233-kilometer (145-mile) direct rail line from the Tavan Tolgoi mine to the Gashuun Sukhait border crossing to China’s Inner Mongolia region.

View from the open pit

Tens of thousands work at open pit mines in Tavan Tolgoi in southern Mongolia, one of the world’s largest coking and thermal coal deposits, with 7.5 billion metric tons of reserves.

Davaadorj Sandagdorj, a supervisor at a provincial government-owned mine there, said it provides critical employment for locals.

“We are not doing it out of choice but due to lack of it. Coal mining has helped us improve our situation,” said Davaadorj, whose parents were miners.

Despite being worried about the environment, “there aren’t many options available for us,” the 45-year-old said atop an open pit, where about 300 miners work.

Last year, a huge anti-corruption demonstration in the capital Ulaanbaatar forced the government to act against a state-owned coal company that operates in Tavan Tolgoi. High-ranking officials were allegedly implicated in illegal coal smuggling to China.

The opposition Hun party estimated the potential revenue loss to be around 40 trillion Mongolian tugriks (US$13 billion).

Experts say mining is one of the main reasons for water, soil and air pollution and degradation in Mongolia, directly impacting herders and their livelihood in the steppe, a semi-arid grassland.

A case study from two mining sites published in April found higher rates of soil erosion in the vicinity of the mines and adjoining industrial areas.

Hard life on the road

Barkhas, the contract driver, mostly drives on unpaved desert roads, rutted from the tires of heavy trucks that can carry up to 100 tons of coal at a time. He drives for weeks at a time. The heavy loads and road conditions mean his top speed is only 60 kilometers per hour (35 mph).

“This is a hard life. The worst thing is for the truck to break down in the middle of the desert,” he said, adding he is worried about losing his job.

“If coal exports stop, tens of thousands of people will lose their livelihood,” he said. “There isn’t enough work in the city, especially for the kind of money we earn.”

Another truck driver ferrying coal from Tavan Tolgoi to the border said he would choose work that was less damaging to the environment, if he had a choice.

“At this point, most youths have only two options: mining or going to South Korea to do manual labor,” he said. “We are of course worried about the environmental mess. This is a beautiful land, but it’s ugly now.”

However, the main threat to his country is actually from China, the 57-year-old said, speaking on condition of anonymity due to his transport company’s policy against speaking to the media.

“China is too powerful, he said. “They want to buy everything as cheap as possible.”

He acknowledged that there is little Mongolia can do about that.

“They are playing with us and our salaries are dependent on China.”

Edited by Josh Lipes and Mat Pennington.

On Monday, annual inflation in Mongolia was 9.2 percent in July 2023, the National Statistical Committee announced.

It is noted that the inflation rate was directly affected by the increase in prices for food products, soft drinks and mineral water by 14.4 percent, for housing services, water, electricity, gas and other fuels by 5.5 percent, and for medicines and medical services by 7.6 percent.

According to the Central Bank of Mongolia, annual inflation in the country reached 10.6 percent in June 2023. This figure fell to 10.4 percent in Ulaanbaatar, where more than half of the country’s population lives.

The Central Bank predicts that Mongolia’s GDP will grow by 5 percent by the end of 2023.

In the last week of June, Mongolian Prime Minister Luvsannamsrain Oyun-Erdene went to Beijing. He met Chinese President Xi Jinping at the Great Hall of the People and came away with a raft of agreements deepening economic and trade ties with his southern neighbor. But around the same time, Mongolian officials in the capital Ulaanbaatar met with Jose Fernandez, the U.S. undersecretary of state for economic growth, energy and the environment, and signed a memorandum of understanding to collaborate on cultivating a supply chain of critical minerals and rare earth elements — resources that are key to the world’s clean energy transition and plentiful in Mongolia.

The interactions then offered a snapshot of the delicate dance played by Oyun-Erdene, whose landlocked country of some 3.4 million people remains in many ways beholden to its huge neighbors China and Russia, but whose democratically elected government is steadily working to diversify its economy and expand its ties to other powers in the region, including Japan, South Korea and the West.

Oyun-Erdene was in Washington last week, participating in meetings at the White House with Vice President Harris and separate sessions with Secretary of State Antony Blinken and Defense Secretary Lloyd Austin. The Harvard-trained reformist had discussions on cooperation regarding minerals, including copper, and signed an “Open Skies” civil aviation agreement with the United States.

“Mongolia is developing its ‘third’ neighbor policy and it is very important to maintain balance in our foreign relations,” Oyun-Erdene told me during an interview in the Mongolian Embassy in Washington last week, stressing that he saw the United States as “one of the most important ‘third’ neighbors” his nation could have.

China and Russia draw closer, but how close?

But Mongolia’s leader also was clear-eyed about the complexities of his country’s position. Mongolia is heavily dependent on its imports of electricity, fuel and many other goods from Russia and China. It’s hoping to develop new infrastructure deals with Beijing that would better link the Mongolian economy to transit routes and ports through China. Long within Moscow’s orbit, Mongolia’s fledgling democracy emerged in the aftermath of the fall of the Soviet Union, but many bonds remain. Mongolia abstained on a U.N. General Assembly vote condemning Russia’s invasion of Ukraine last year.

Speaking beneath a portrait of Genghis Khan, the famed medieval Mongol conqueror, Oyun-Erdene extolled his nation’s parliamentary democracy and commitment to political values shared with the United States. But he cautioned against the ideological hawkishness that’s taken hold of U.S. Congress, with many lawmakers pushing for more of a direct confrontation with China.

“If there will be a new Cold War, it will be very different and difficult from the first one we had,” Oyun-Erdene told me, pointing to the dangers posed by conflict in a world shaped by rapidly advancing new technologies, including artificial intelligence. He said that while China’s “development path” and values differ greatly from that of the United States, the two global powers have a shared stake in many global challenges, including collective action on climate change.

The Mongolian prime minister also stressed that neither Russia nor China were a threat to his country, despite particularly pronounced anti-Beijing sentiment among his compatriots. “We have two immediate neighbors and we are different in government system and in some values,” he said. “But those two neighbors understand our development path chosen by the people of Mongolia, and they do have respect for our development path even though we differ from their systems.”

Despite reforms, mining for EV metals in Congo exacts steep cost on workers

But Mongolia is keen to broaden its horizons. Oyun-Erdene touted his government’s efforts to overcome a difficult political environment, which the U.S. ambassador in Ulaanbaatar described in January as “capricious, non-transparent, unpredictable,” adding that “corrupt application of laws and regulations make Mongolia unattractive for investors and challenging for importers and exporters.”

An aggressive anti-corruption crackdown is underway. Meanwhile, new constitutional reforms expanded the legislature and reshaped elections along a mixed system of proportional representation seen in countries like Germany and New Zealand. These measures, Oyun-Erdene told me, would help improve governance and transparency, especially surrounding the lucrative mining industry. “In the past, we did have some mistakes,” he said, but “now we are improving the investment environment.”

The potential could be huge, given Mongolia’s rich bequest of minerals — including copper and uranium — and rare earths. “Demand for critical minerals including rare earth elements, lithium and cobalt are expected to surge by as much as 600 per cent over the coming decade,” noted the Financial Times. “Demand for copper is forecast to double to about 50 million tons annually by 2035. And if the world is to reach net zero emissions by 2050, annual investment in nuclear energy will also have to triple to about $125 billion over the coming five years, according to the [International Energy Agency].”

Oyun-Erdene sees his nation’s gross domestic product potentially tripling by the end of the next decade. The most significant illustration of its prospects may be the mammoth Oyu Tolgoi copper mine, which sits amid the vast Gobi Desert and is run by multinational conglomerate Rio Tinto with a minority stake controlled by the Mongolian government. The mine is positioned above one of the world’s largest reserves of copper and gold deposits and started underground production in March after years of wrangling between the company and Ulaanbaatar.

This surge in output is a start, but further efforts to curb graft and improve transparency and significant investment in infrastructure need to follow. Oyun-Erdene speaks hopefully of his nation’s resource blessing enabling the development of more high-end sectors of the supply chain; he has pitched Mongolia to Tesla chief executive Elon Musk for its ability both to contribute to the manufacture of electric vehicles as well as ventures into space.

“Mongolia should not just be a mining country. We have great potentials in other sectors, too,” Oyun-Erdene said. “There is a phrase that I like to say: ‘Mongolia is landlocked but not mind-locked.’”

By Ishaan Tharoor

Ishaan Tharoor is a foreign affairs columnist at The Washington Post, where he authors the Today's WorldView newsletter and column. In 2021, he won the Arthur Ross Media Award in Commentary from the American Academy of Diplomacy. He previously was a senior editor and correspondent at Time magazine, based first in Hong Kong and later in New York

In the first week of September, Pope Francis will be on a visit to Mongolia, a country sandwiched between Russia and China. It will be the first time that a pope sets foot on Mongol land. And, this papal visit will be full of geopolitical significance.

Diplomatic relations between the Catholic Church and the Mongols have a pluri-secular history. The first encounter between the two occurred in the 13th century, long before most nation-states existed.

In 1289 Pope Nicholas IV sent a first legate, Italian Franciscan missionary Friar John of Montecorvino, to the Great Khan of the Yuan dynasty. At the time, the dynasty covered a transcontinental empire, which included all of China and parts of Eastern Europe.

Montecorvino was able to formalize relationships between the two superpowers and re-establish Christianity in the Far East. In 1336, we see Toghun Temor, the last emperor of Yuan dynasty, sending an embassy to Pope Benedict XII based in Avignon, France.

Unfortunately, a few years later, the Black Death came. Over a few months, millions died and the world was reshaped. Yet, the Mongols and the Catholic Church survived. They were deeply impacted but they never disappeared. They continued to evolve, and their testimony remains alive today.

In other words, Pope Francis in Mongolia is not an absolute beginning. It is a reconnection with centuries of intercultural exchanges, marked by breakthroughs and setbacks, but filled with resilience that may help to address the difficulties of contemporary world affairs.

"This nation stands at the center of long-term Asian interests"

In Mongolia and with the Mongols, Pope Francis is walking with a great civilization for the sake of the Mongols and the rest of the world.

Today, Mongols have lost most of their territories. Their northern lands have been colonized by the Russians and their southern steppes by the Chinese. In China, a gigantic Inner Mongolia province still exists, and some Chinese politicians do not hesitate to claim sovereignty over the whole of Mongolia.

In the rest of Central Asia, a handful of sovereign states emerged. They share a long history with the Mongols and remained influenced by cultural and political traditions coming from the Great Khan. Whatever happens to the Mongols resonates with the rest of the region.

In the eyes of the West, Mongolia might be at the periphery of contemporary trading roads and maritime exchanges, but this nation stands at the center of long-term Asian interests.

When the Soviets collapsed, Mongols soon embraced the ideal of self-determination and democracy. For decades, their new state worked hard to build national autonomy and was able to succeed in building economic growth and secure harmonious relationships with powerful neighbors. Mongolia was a model for other Central Asian states.

But 30 years after the collapse of the Soviets, doubts about democratic ideals are growing. Mongolian elites are facing a crisis of confidence. The economic boom of the 2000s is gone. Urban migration pushed half of the nation to lose its ancestral lifestyle. Corruption and authoritarian temptations are growing.

In this context, it is most likely that Pope Francis will act as he did in Kazakhstan. During his visit in 2022, he did not hesitate to sermon with Kazakh elites. His point was not to support one political system over another. His goal was to question the ultimate values that a nation wants to defend and serve.

Francis will certainly talk again about the need for an inclusive political system able to cherish every single life, support justice and peace for all, and nurture natural resources.

"The Chinese regime is reluctant to improve its relations with the Holy See"

Unfortunately, Mongolian lands have long been treated as a site of selfish extraction. Either by the Russians during the Soviet Era or by the Chinese and Australians after 1990, Mongol territories have long been vandalized and abused.

The multi-secular wisdom of the Mongols has been silenced by the egoist interests of a few. Vast pastoral lands have been turned into gigantic mines. In central Asia, the massive extraction of natural resources is at the center of deep political interests, international relations, and ecological catastrophes.

Pope Francis is well aware of how Central Asia is vital for the ecology of our world. After the Amazon, it is the second lung of the earth. When the sky of the Mongols is no longer blue anymore and their steppes no longer green, our planet is in danger. Pope Francis is naturally expected to talk about the ecological challenges that Mongolia is facing.

Like in Kazakhstan, papal concerns about Russia and China will also be an important part of the visit. In 2022, Francis tried to meet with Xi Jinping in Nur-Sultan but the Chinese leader was too busy to meet with him. The Chinese regime is reluctant to improve its relations with the Holy See.

Sino-Vatican relations are historically low. But if China does not come to Rome, Francis invites himself in Mongolia and knocks at the door. Francis never gives up!

Similarly, Russia will be on the agenda. The war in Ukraine and the madness of Vladimir Putin cannot be ignored. This is a threat for the entire humankind. If papal calls for peace and justice are difficult to listen to, Pope Francis will not stop explaining them. Violence cannot be the solution.

With the Mongols who built a unique civilization, interconnected continents, and gathered centuries of wisdom, Pope Francis will invite all to not let the difficulties of our time overwhelm us. The ecological tragedies and political mistakes of the past should be a lesson for today.

BY: Michel Chambon

*The views expressed in this article are those of the author and do not necessarily reflect the official editorial position of UCA News.