Perth-based TMK Energy has reached another milestone at its Gurvantes XXXV coal-seam gas project in Mongolia’s South Gobi Basin, with all three of its pilot wells entering production testing.

After successfully discovering thick gassy coal intervals of up to 68m with its Lucky Fox 1, 2 and 3 wells, the company earlier this month installed three sets of downhole pumps and driveheads, in addition to surface gas-handling facilities, in preparation for flowing hydrocarbons to surface as part of its production tests.

TMK has confirmed its downhole pumps have now been turned on at low rates and are producing water from all three wells, in line with engineering expectations. It confirms coal-seam permeability and the successful installation of all downhole and surface infrastructure.

Water is a rare asset in the arid Gobi Basin and it will not go to waste in this instance as TMK has agreed to provide nearby coal miner Mongol Alt LLC (MAK), which also owns the Gurvantes lease, with early-stage water from the tests to feed its nearby power and water-hungry coal mining operations.

To produce gas, TMK plans to gradually increase downhole pump rates in the coming weeks to de-pressurise the gas-bearing coal reservoir to a point where gas “desorbs” from the coals, enters the wellbore and flows to surface in a phenomenon known as “gas breakthrough”.

Management says modelling suggests its gas breakthrough could occur at any moment, following initial reservoir de-pressurisation.

Since acquiring the Gurvantes XXXV Coal Seam Gas Project less than 18 months ago, TMK has drilled seven CSG exploration wells, discovered a significant gas resource, drilled and completed three pilot production wells, built and commissioned production facilities and has now commenced production testing from the pilot well program. First gas production from the extended production test will propel the Project out of the exploration phase and firmly into the appraisal and development phase for the Nariin Sukhait area. The 2023 exploration program aims to further demonstrate the true scale of the Project and we look forward to commencing this aspect of the work program over the coming months.

TMK Energy chief executive officer Brendan Stats

As production testing progresses, the company expects to measure sustained gas flow from the wells. The data will feed into TMK’s prefeasibility study for the Gurvantes project, which has an estimated (2C) contingent resource of 1.2 trillion cubic feet of high-methane gas.

Following initial gas flaring at site, steady flow from the pilot wells will feed an energy offtake agreement, signed in March this year between TMK and MAK. The deal will see produced gas used for modular power generation at site, which will then be sold to MAK at the prevailing local energy wholesale price, providing TMK with a clear pathway to early commercialisation.

Gurvantes is operated by TMK as part of joint venture with Perth-based partner, Talon Energy, and signals the company’s commitment to long-term gas production in Mongolia, where it has an exploration licence for 15 years in an area widely regarded as one of the most prospective coal-seam gas basins in the world.

In addition to the local Mongolian need for gas, other market opportunities for TMK includes China’s significant natural gas market, currently serviced by importing via long-distance pipelines from central Asia, Russia and Myanmar.

China also imports gas by sea, buying 63.4 million tonnes of tanker-shipped liquefied natural gas (LNG) last year, with total LNG imports meeting only 41 per cent of its demand.

The Chinese border is tantalisingly close, less than 20km south of the Gurvantes project. China’s huge west-east gas pipeline sits another 280km across the border.

With production testing kicking off at Gurvantes, TMK has continued its rapid development of the project after acquiring it less than 18 months ago. The company will continue to hunt this year for prospective resources along strike of Gurvantes where outcropping coals suggest more gas potential.

A 2D seismic survey is planned, with up to eight more exploration wells also in the company’s pipeline.

On the eve of the National Naadam Festival, entrepreneurs from Mongolia and the Republic of Korea convened at a B2B meeting, setting the stage for enhanced economic ties and cooperation between the two nations. Sigma Mongolia LLC, in collaboration with the Mongolian National Chamber of Commerce and Industry, spearheaded the event, which saw the participation of officials from North Chungcheongbuk-do province in South Korea, warmly greeting entrepreneurs from both countries.

Fostering Foreign Trade and Cooperation

The primary objective of the B2B meeting was to bolster foreign trade relations and expand cooperation opportunities for businesses from Mongolia and South Korea. Recognizing the potential for increased trade turnover and economic collaboration, the meeting provided a platform for fruitful exchanges and discussions on joint ventures and mutual business interests.

Confluence of Entrepreneurial Spirit

With 20 companies from North Chungcheongbuk-do and Busan provinces in South Korea, alongside more than 30 Mongolian enterprises, the B2B meeting showcased the diverse and dynamic entrepreneurial spirit of both nations. Entrepreneurs explored avenues for collaboration in various sectors, fostering economic integration and strengthening the foundation for long-term partnerships.

STS Foods: A Start-Up Embarks on Overseas Activities

A highlight of the B2B meeting was the debut of STS Foods, a Mongolian start-up entering the international market with its unique soup product. MonCertf LLC, the parent company of STS Foods, secured the right to export their product to the Republic of Korea and Russia, paving the way for overseas expansion. Additionally, the start-up is keen to explore opportunities in the market of Vietnam, marking a significant milestone in its journey toward global trade.

The establishment of STS Foods represents the entrepreneurial potential of Mongolia and its commitment to engaging in international trade, promoting its local products and flavors on the global stage.

Forging a Stronger Economic Alliance

As Mongolia and South Korea continue to strengthen their economic bonds, the B2B meeting served as a stepping stone toward deeper and more meaningful trade relationships. The event demonstrated the willingness of entrepreneurs from both countries to explore new frontiers and collaborate across borders, fostering an environment of economic growth and prosperity.

As a testament to the commitment of both nations to international trade, the B2B meeting was a resounding success, laying the groundwork for future cooperation, shared endeavors, and a flourishing partnership between Mongolia and South Korea.

BY:

Mamoon Alvi serves as an integral part of our global newsroom team. With a strong background in international news from his time at both BOL TV and Dharti TV, he came on board at BNN well-prepared to contribute. Mamoon's unwavering dedication to journalism drives him to relentlessly pursue the truth and deliver crucial stories to audiences around the world.

"Personal experience completely changed my view of China." Ganqimeg, a journalist from the Kent branch of the Mongolian Journalists Association, exclaimed during a joint media interview activity titled "Encounter with China, Encounter with the New Era" in East China's Shanghai city and Jiangsu province.

"China's fast economic development, stable people's livelihoods, extensive cooperation between the government and the private sector, and excellent infrastructure and ecological environment construction have left a deep impression on me," Ganqimeg added.

The activity was jointly organized by the All-China Journalists Association and the Mongolian Journalists Association, and hosted by the Information Office of the People's Government of Inner Mongolia Autonomous Region.

It was launched on June 25 in Hohhot, the capital city of Inner Mongolia, and concluded in Nanjing, Jiangsu province, on July 2.

Over the course of a week, nearly 30 journalists from 23 mainstream Mongolian media outlets had a unique opportunity to witness the remarkable progress being made in various fields in China. They toured several cities, including Shanghai, Suzhou, Nantong, and Nanjing. They were able to see for themselves the impressive strides being taken in China's achievements in technological innovation, urban governance, ecological restoration, and heritage protection firsthand.

The first stop for the China-Mongolia joint interview team was the Shanghai MicroPort Medical Co, where they gained in-depth insights into the development experience of the "MicroPort" series of medical robots.

The Mongolian journalists were amazed by the intense research and development capabilities and powerful product lineup demonstrated by the company.

Unurtogs, a journalist from the Mongolian Dardas Network, said, "In Mongolia, the mortality rates of cancer and cardiovascular diseases are high. Therefore, remote-controlled advanced medical technology and new types of robots capable of performing surgeries have captured my great attention."

In Shanghai's Wuliqiao sub-district, the interview team witnessed the latest achievements of urban governance. In recent years, Wuliqiao has actively promoted the installation of elevators in residential buildings and waste reduction through garbage sorting.

The Mongolian journalists took a ride on the elevators installed in residential buildings and showed great interest in this governance model, which residents and communities jointly promote. They appreciated the government's support, such as providing a 40 percent subsidy and a maximum of 280,000 yuan ($39,942.94) for elevator installation projects.

During the interview, the beautiful and environmentally-friendly surroundings of cities and countryside along the way deeply impressed the Mongolian journalists.

Altanzagas, a journalist from Ulaanbaatar News Network, said, "I can deeply feel China's achievements in ecological protection and green city construction. I hope we can learn more about ecological protection and the construction of green cities and apply them to the development of our own country."

The preservation and inheritance of Chinese traditional culture also left a deep impression on Mongolian journalists. Whether it was the Imperial Kiln Golden Bricks in Suzhou, woodblock prints in Qidong, or the ancient city walls in Nanjing, the infinite charm of traditional Chinese culture dazzled the journalists.

After the activity, the Mongolian journalists expressed their admiration for China's development achievements. They stated that they would introduce their experiences during the interview in Shanghai and Jiangsu to the Mongolian people, using their genuine feelings as a bridge for communication between the two countries.

Larixon Classifieds, a Cyprus-based company that operates leading marketplaces in small, early-stage classified markets from Mongolia to the Caribbean, has appointed Amartsogt Batbayar as its managing director in Mongolia.

An experienced business development manager with a history of working in the fintech and financial services industry, Batbayar will be responsible for Unegui.mn, the largest website and mobile app in the country, with over 7 million visits per month and annual revenue of up to MNT4 billion ($1.2 million U.S.).

“We believe that his experience and strategic vision for development will take us to a new level,” said Larixon Classifieds. “We have new and ambitious goals and tasks ahead of us.”

Batbayar (LinkedIn profile) has a bachelor’s degree in business administration and international relationships from the Mongolian Swedish Wind Horse College.

One of his most recent projects in Mongolia was EasyPay, a payment system integrated with POS terminal, QR payment and e-wallet tools, offering local merchants analytical tools and owner/admin dashboards, in a bid to make acquiring new clients easier and quicker.

In addition to Unegui.mn, Larixon Classifieds’ portfolio includes leading horizontals Bazaraki.com in Cyprus, Somon.tj in Tajikistan, Pin.tt in Trinidad and Tobago, and JaCars.net, the leading automotive marketplace in Jamaica.

Bayantal, Mongolia: Oyunbileg Dambii remembers when the Russian officers came. They brought money, guns and planes to this fertile land in southern Mongolia.

“It was nice,” the goat and sheep herder says. “You could barter things, you could exchange small goods here and there.”

Between Mongolian fields of green, the Russians built apartment blocks for servicemen in the middle of nowhere, erected statues of Soviet heroes and paved airstrips aimed not at the west or the east, but to the south, towards China.

The Soviet Union had reached its peak. March 14, 1979, reads the Russian broadsheet now peeling from the walls of the abandoned airforce base in Bayantal. Pravda reported that long-range television broadcasting capabilities had successfully been installed on a satellite orbiting 40,000 kilometres above the Earth. In Moscow, preparations were underway for the 109th anniversary of the birth of revolutionary Vladimir Lenin.

“Then they got kicked out,” says Dambii, who has spent all of his 64 years tending to the fields of Bayantal, where children gallop past on horses at 50 kilometres an hour, straight into sleeting rain.

Moscow shrunk as Beijing’s influence grew. One by one the bunkers filled with warplanes emptied. The runways that once countered the threat of China grew green with moss, the apartments with mildew.

Now a family of four, their dog and a yurt guards the entry to the last vestiges of a fallen military power, whose domain once stretched to the Chinese border but now struggles to maintain its own frontline in Ukraine.

“Russians are stupid,” says one of the base’s guards, who asks not to be identified because they are not authorised to speak publicly.

Dambii uses a bunker once filled with 20 Russian armoured vehicles as a shelter for his 200 goats and 800 sheep. The rent is five sheep a year paid to the local council. “It works really well,” he says. “It keeps them warm”.

Nearby, children play football on the rooftops of buildings where posters of revolutionaries once hung.

“I wish they would demolish it,” says 15-year-old Ermuun Enkhbayar. “It’s f---- ugly.”

Mongolia, like other states with deep links to the former Soviet Union, is wrestling with its ongoing ties to Moscow. It is divided into generations who were educated in Russian and those now learning in English. By those who believe they owe a debt of gratitude to the Russians that gave some of them running water and heating, and those appalled by what they are seeing unfold in Ukraine.

“This nation is squeezed,” says the leader of Mongolia’s youth-focused third party, HUN, Togmidyn Dorjkhand. “We are very opposed to this situation in Ukraine.”

At the height of its power in the 1970s, more than 50,000 Russian troops were stationed in Mongolia across half-a-dozen bases, accompanying 1800 tanks and 190 planes. By 1992 they were all gone. Older generations remember them fondly, but Russia’s war in Ukraine has damaged Mongolia’s rapidly modernising economy by restricting fuel, flights and goods to a younger generation that has become reliant on international supply chains.

“With the global economic fallout from Russia’s protracted invasion of Ukraine showing no sign of ceasing, Mongolian families, farmers and businesses will continue to feel the squeeze,” said Oyuntugs Davaakhuu, a researcher at the Economic Research Institute of Mongolia.

Increasingly, as Russia’s power has diminished, Mongolia has made its economy dependent on the emerging superpower to its south.

China now buys 90 per cent of Mongolia’s exports, mostly coal and other resources. But its economic support has done little to sway public opinion in a country that remains rooted in its own ethnocentrism, independence and history.

“The Chinese are picking us little by little,” says Tsendkhorloo Erdnebaatar, 56, a paver who has broken down in the eastern Gobi Desert with her family, on her way to a local service station.

“I’m very afraid of what will become of the younger generation.”

Gantugs Begzsuren, who sources 95 per cent of his products from China for his store on the Chinese border, cannot bring himself to contemplate stronger economic ties with his southern neighbour.

“It will be very difficult if there is more Chinese influence in Mongolia,” says the phone shop owner in Zaamin-Uud.

Wary of growing Chinese power, Mongolian ties to Moscow still run deep, even as Russia’s influence crumbles into the landscape.

In the middle of the Gobi Desert sits the remains of a 25-metre pool. The starting blocks rise above the blue tiles and black lines that once marked the lanes of Russian officers’ laps at one of their largest bases near the town of Sainshand.

“It was a living base,” says Erdnebaatar. “Russia is like a big brother. At least they gave us something.”

For younger Mongolians, the loyalty of their parents is being tested by the Russian recruitment drives which have targeted minorities and sent them straight to the frontline, including Buryats - ethnic Mongolians living in Siberia.

“There were a lot of young men who came through here, some of them with their families,” says Uyanga Otgonbaatar, who runs a store in Altanbulag on the Mongolian-Russian border in the country’s north.

They bought flour, eschewed Vodka, and talked little, she says. They wanted to get out before it was too late.

“They were fearful,” says Dashdondog Gankhuyag, who runs one of three money exchanges in Altanbulag.

At one stage the rouble was so volatile she could no longer afford to exchange large sums of the Russian currency for Mongolian tugrik.

“They were scared they were going to be sent to the front line quickly,” she says. “We feel close to them because they are like us.”

In Altanbulag, 1000 kilometres north of the Chinese border, Beijing is already making long-term investments.

The highway that leads to Russia is being built by the Chinese government. “China Aid” the sign reads into Khyagt, the Russian border town.

Chinese construction workers who were not authorised to speak publicly said Mongolia donated 30,000 sheep to China to help with widespread meat shortages during the COVID-19 pandemic. Now, the Chinese government is paying Mongolia back.

When it is finished this year, the four-lane highway will be able to carry much more than sheep.

Mongolia’s pastures provide a clear view of the geopolitics playing out between Beijing and Moscow since Russia shocked the world by invading Ukraine last year. That great game extends across the Eurasian landmass, and beyond.

China has repeatedly maintained its neutrality in the war and declared its “unbreakable bond” with Russia while taking economic and diplomatic advantage of Moscow’s misfortune.

“China is increasingly a power in Europe,” said Andrew Michta a non-resident senior fellow at the Atlantic Council, a Washington-based think tank.

Michta cites the series of recent high-level visits to China by German Chancellor Olaf Scholz, French President Emmanuel Macron, and President of the European Commission Ursula von der Leyen - all with the explicit purpose of lobbying China to use its economic leverage over Russia to end the war in Ukraine, turning Beijing into a major diplomatic power.

China also stands to benefit from cheap Russian energy that has few other export markets, transfers of military technology, the weakening of Russia’s borders and internal political turmoil.

“A protracted war of attrition in Ukraine serves Beijing’s interests in that it will lead to the long-term weakening of Russia, thereby fundamentally shifting the Sino-Russian power balance decisively in China’s favour for years to come,” he said.

Michta believes an extreme collapse of Russian power could see Russia’s central and eastern parts becoming subject to Chinese demand for resources, “or as unlikely as it might seem now - even colonisation”.

In Bayantal, Dambii says some Russians visit the abandoned bases in Mongolia to see the remains of Russia’s former glory.

“Maybe they go home a little heartbroken,” he says.

BY:

Eryk Bagshaw is the North Asia correspondent for The Sydney Morning Herald and The Age.

Every summer, from July 11 to 15, Mongolians wear their traditional clothes, deel, unite with their families and friends, and celebrate the summer festival, Naadam. In the last decade, Mongolia’s Naadam celebration has modernized, grown, and became more international.

Traditionally, the Naadam Festival symbolizes Mongolia’s independence, sovereignty, national unity, statehood, history, culture, heritage, and customs. Therefore, Naadam is highly regulated even as it is celebrated throughout the country. Each of the 21 provinces of Mongolia organizes distinct Naadam festivals.

The opening ceremony of the Naadam Festival convenes in the National Sports Stadium near the capital, Ulaanbaatar. Chinggis Khaan’s Great White Banners once again rise to unify Mongolians around the world every summer, and Mongolia celebrates its history, including its modern-day revolution, and the ebbs and flows of the Mongol Empire.

This year’s Naadam theme was “Eternal Unity” and its featured historical tales and founding myths. According to Monstame, the opening ceremony including “six chapters” titled “The Everlasting Unity Hymn, The Great Epic, The Time of Great Mongol Destiny, The Migration of the Three Times, The Altan Tevsh Valley, and World Mongol.”

More than 1,500 artists, singers, dancers, horse artists, and craftsmen participated in the opening ceremony, including perhaps the largest variety of local talents yet.

According to Mongolia’s Minister of Culture Nomin Chinbat, “The successful opening ceremony demonstrated the foundation, future vision, valuable nomadic heritage, history, culture, unity, and the harmonious connection between humans and nature. In preparation alone, over 4,000 professional and freelance artists, industry workers, and employees from 79 cultural and artistic organizations have collaborated.”

In a separate venue, a collaboration between Rio Tinto, the Mongolian National University of Arts and Culture, and the Arts Council of Mongolia showcased Mongolia’s heritage, particularly folk art and nomadic craft forms.

The newly appointed U.S. ambassador to Mongolia, Richard Buangan had high praise for the festival: “These few days have been absolutely incredible. I think Mongolia should hold Naadam all year long.”

During Naadam, various traditional sports competitions such as national wrestling, archery, national horse racing, and ankle archery are organized, and special titles and decorations are also awarded.

This year’s Naadam also included the “Mongolian Pride” photo exhibition, the Deeltei Mongol festival, the “Beauty of Mongolia” art exhibition, public entertainment, the President’s Honorary Event, and the Cultural Festival, which together encompass a wide range of activities for domestic and foreign tourists.

In many ways, Naadam is a way for Mongolia to celebrate its history and achievements, while showcasing modern Mongolia on an international stage. As Ulaanbaatar aims to diversify its economy, tourism is viewed as a potential revenue stream. Mongolia’s government has designated 2023-2025 as the “Years to Visit Mongolia.” The government’s post-COVID recovery plan includes a “Welcome to Mongolia” initiative as part of its plan for increasing tourism, with the goal of reaching 1 million tourists in 2023.

In the quest to boost tourism, Naadam plays an important role in showcasing the country’s culture and traditions while providing opportunities for local businesses, entrepreneurs, and travel agencies. The successful organization of Naadam, in turn, makes Mongolia a bit more internationally relevant each year. In the last decade, Naadam has become one of Mongolia’s major cultural attractions for tourists, researchers, and Mongolia enthusiasts. These efforts have strengthened the collaboration between the government, the private sector, and the global community.

Another factor in Nadaam’s internationalization is the growth of the Mongolian diaspora. As Mongolians migrate to different continents, the establishment of Mongolian communities around the world helps to preserve Mongolian traditions, cultural activities, and national holidays and festivals such as Naadam and the Mongolian Lunar New Year. Mongolian communities in the United Kingdom, Europe, Australia, Canada, and the United States are all active in celebrating the annual Naadam festival.

As Mongolia strives to transition to an advanced democracy, its culture and heritage must modernize without losing their essence. Naadam, too, has modernized, and its cultural prevalence provides momentum on an international level.

The official framing of Naadam was captured in its 2010 inscription on the Representative List of the Intangible Cultural Heritage of Humanity. According to the entry, “Mongolian Naadam is inseparably connected to the nomadic civilization of the Mongols, who have long practiced pastoralism on Central Asia’s vast steppe. Oral traditions, performing arts, national cuisine, craftsmanship, and cultural forms… also feature prominently during Naadam.”

Mongolians believe that the showcase of nomadic civilization, traditional arts and crafts, dance, and gestures in Naadam is modern Mongolia’s way of passing the torch to a younger, more international generation.

On the other hand, Mongolia is also aiming to make its traditional culture more accessible to non-Mongolians. The Ministry of Culture is providing cultural services to foreigners through affiliated institutions such as museums and libraries. For example, as part of the special cultural programs, the play “Mongolian King” was performed in English, which has been popular among tourists. Theaters and museums are also operating without holidays to cater to the increased tourist demand.

In addition to the Naadam celebration, various provinces are celebrating their 100th anniversary this year, and the Mongolian countryside will be full of festivities organized for both foreign and domestic tourists. The recent sighting of the British actor, Christian Bale, is an inviting sign that Mongolia is becoming a major travel destination.

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Bolor Lkhaajav

Bolor Lkhaajav is a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and the Americas. She holds an M.A. in Asia-Pacific Studies from the University of San Francisco.

Battsengel, 50, lives in the south of Mongolia, in Khanbogd district, Ömnögovi province, just over the border from China’s Inner Mongolia. He has made a living herding livestock since he was 20. But sandstorms of increasing frequency are making things very tough.

“Precipitation started to fall off in 2004. By 2015, we were seeing long periods without rain and shorter intervals between droughts. Sandstorms became more frequent, meaning we lost more and more cattle,” he said.

Scientists have warned that Mongolia may already have passed a tipping point. The region is drier and warmer than at any point in 260 years and the trend towards a drier climate may be irreversible.

Parched soil means a never-ending source of material for sandstorms, and the worsening environment is already having an impact across the border in China.

Beijing, 850 kilometres from where Battsengel lives, has seen a number of sandstorms this year. They have caused air quality issues and triggered much debate on social media. It’s not just Beijing and the north – sandstorms have even reached south of the Yangtze. The issue can no longer be ignored. In May, China and Mongolia agreed to set up a joint centre to combat desertification, and other cooperation in this field is already underway.

Mongolia: a key factor in China’s frequent sandstorms

Mongolian sandstorms affecting China is not something new. In March 2021, a huge one enveloped almost the entirety of Mongolia, leaving 10 herders dead. The storm then moved on to hit parts of northern China. This year has been even worse for China.

At a regular Ministry of Ecology and Environment (MEE) press conference in May, Jiang Huohua, deputy head of the ministry’s Department of Ecological and Environmental Monitoring, said China had seen 12 instances of “dust weather” in the first four months of the year, six of those in April. The sand was coming mainly from the south of Mongolia and China’s north-west.

According to the China Meteorological Administration, the strongest of those storms occurred between 19 and 23 March. It was the third-strongest March sandstorm since 2000, affecting 4.85 million square kilometres. Less than a month later, another sandstorm struck, between 9 and 13 April. And this time it made headlines by reaching over the Yangtze.

Mongolia can account for 70% of the sand in a Beijing sandstorm

Jiang Huohua, deputy head of the MEE’s Department of Ecological and Environmental Monitoring

Satellite monitoring data shows that both of those sandstorms originated in Mongolia. Jiang Huohua said Mongolia can account for 70% of the sand in a Beijing sandstorm, and more than 50% in north-east China and other parts of middle and eastern China. Both the south of Mongolia and China’s north-west have seen higher temperatures and drier weather than usual this year – ideal sandstorm conditions.

Of course, Mongolia isn’t the only cause of the increased number of sandstorms, points out the National Climate Centre. The Asian winter monsoon may be at the top of a 20–30-year cycle, meaning stronger winds blowing across the deserts and picking up more sand. Stronger polar vortexes have been observed in the Arctic since March, and there has been more cyclone activity in Mongolia. All these atmospheric phenomena make sandstorms more likely.

“China has seen more frequent and intense sandstorms this year, with Mongolia making more of a contribution than previously. Whether that’s a one-off unique to this year, or a new normal emerging from climate change, requires further research and observation,” Ma Jun, director of the Institute of Public and Environmental Affairs, told China Dialogue.

But there is no doubt that the worsening environment in Mongolia is having an impact.

Desertification in Mongolia may have passed a tipping point

The damage to the environment is due to both economic development and climate change. In the 1990s, Mongolia initiated market reforms to relieve poverty. That led to major expansions of mining and livestock grazing. The grasslands have been threatened by overgrazing and unregulated mining ever since.

According to the Southern Weekly, Mongolia’s own statistics show that there were 24.8 million head of livestock in the country in 2022, up from 7.11 million in 1982, and far above sustainable levels. More than half of all grassland is seeing carrying capacity breached by a factor of between two and five, according to 2018 figures from Mongolia’s Information and Research Institute of Meteorology, Hydrology and Environment. For 9% of the grassland, the load is more than five times the sustainable level.

Overgrazing is one threat to the grasslands. Export-driven mining is another, worsening, factor.

Mineral-rich Mongolia gets 90% of its export income from raw and processed minerals. Four-fifths of direct foreign investment into the country goes towards mining, and the sector accounts for 26% of overall GDP. To attract overseas investors, Mongolia passed the Land Allocation Law in 2003 which stripped rights from nomads if they refused a mining company’s offer of compensation for resettlement.

An open-pit copper mine in Mongolia

An open-pit copper mine in Erdenet, Mongolia (Image: Alamy)

Ömnögovi, where Battsengel lives, is one of Mongolia’s major mining areas. Until 2000, there was only one mine here – a state-owned coal mine. But as overseas capital flooded in over the following two decades, more mining firms set up shop. There are now 12 major mines here, including one of the biggest gold and copper mines in the world.

Battsengel and others in his community blame mining for the increase in sandstorms, and say herder families in the area have suffered a lot.

“Use of scarce underground water by mining leads to physical damage of soil and loss of moisture in the soil, causing the natural water/humidity cycle to fail, which in turn increases instances of sandstorms, reducing the size and number of available pastures. Even if young herders begin to herd, the lack of water and pastures is forcing them to seek other sources of livelihood income,” he said.

The Mongolian government expects groundwater in Ömnögovi to be exhausted in a matter of years, according to a Third Pole report.

Herders now encourage their children to find employment in the mining sector and force them to attend cheap schools in order to get technical certificates

Battsengel went on: “While the number of livestock in our region has reduced, increased livestock numbers are still blamed for sandstorms. Herders now encourage their children to find employment in the mining sector and force them to attend cheap schools in order to get technical certificates.”

Ma Jun explained: “Mining has a huge impact on the nearby environment. Take coal mining: aquifers nearby need to be drained before mining can start, which is disastrous for groundwater. And if wastewater from mining isn’t handled properly, it can cause pollution.”

Grasslands are under pressure from livestock and mining, while a drying climate is making restoration of those grasslands ever harder.

In 2020, a paper published in the journal Science said that “inner East Asia” – Mongolia and its surroundings – had already passed a climate tipping point. The region had seen a hotter and drier climate over the previous two decades than at any time in the past 260 years, and factors exacerbating the trend had formed a positive feedback loop: loss of soil moisture was leading to surface warming and an unusual climate, with the resulting heatwaves further reducing soil moisture. The scientists warned that this might represent an irreversible trend.

Other research found average temperatures in Mongolia rose by 2.24C between 1940 and 2015, while precipitation fell 7%. And between 1987 and 2010, more than a quarter of lakes larger than 1 square kilometre on the Mongolian plateau dried up.

More cooperation needed

Mongolia is taking measures to combat desertification. One of these is reforestation.

On 22 September 2021, Mongolia’s president, Khurelsukh Ukhnaa, committed at the UN General Assembly to the planting of one billion trees by 2030. A “Billion Tree Plan” was launched on 10 October that year.

With Beijing ravaged by sandstorms this year, some civil society voices have called for China to strengthen cooperation with Mongolia and help the country tackle desertification.

afforestation of Planted “shelterbelt” forest in Gansu province, northwest China (Image: Alamy)

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There was already some cooperation in this area, including training on how to prevent desertification and demonstrations of Chinese technology. Since 2017, the Chinese Academy of Sciences has been running a 27-hectare project in the south of the Mongolian province of Bulgan, demonstrating how to stabilise mobile and semi-mobile sand dunes and increase vegetation.

In November 2022, China’s president, Xi Jinping, met with Khurelsukh Ukhnaa saying he hoped to set up a joint centre to combat desertification, providing Chinese expertise and technology to balance conservation with development.

In May, after the spate of sandstorms, the National Forestry and Grassland Administration and its Mongolian counterpart reached agreement on creating that centre, with the initial planning and mission for the organisation confirmed.

aerial photo reforestation inner mongolia China

Voluntary tree planting in Gansu province, 24 March 2021 (Image: Wu Xihui / Alamy)

“Cooperation between China and Mongolia on sandstorms is still limited and shallow. More cooperation and discussion is needed to determine whether or not Mongolia can adopt Chinese practices, or if it has its own unique needs. Climate and geography always differ across place,” said Ma.

China has more desert than any other country and is worst affected by sandstorms. Over the decades it has taken measures, including the creation of shelterbelt forest and removing livestock, to help restore grasslands and successfully reverse desertification. In the process it has accumulated considerable experience in tackling sandstorms.

“In terms of policy, China pushed through large-scale removals of livestock to control overgrazing, as well as creating permanent settlements for nomadic herders. There were challenges and issues along the way, but overall pressure on the grasslands has eased, helping the return of vegetation. Latest practices include importing water to dry areas, which prevents rivers drying up downstream due to excessive agricultural, industrial and domestic water usage. Experience has also been accumulated here,” said Ma.

Ma says tackling sandstorms needs to consider local circumstances. Is an area best suited to becoming a forest, a grassland or a desert? Deserts are a type of ecosystem and if left undisturbed a tough surface layer can form which the wind cannot pick up.

Camels drinking at a creek in a desert

Gobi Desert, Mongolia (Image: Bayar Balgantseren / Alamy)

“I recommend Mongolia takes China’s experience into account and avoids the wrong turnings we took. I’ve seen large expanses of dead trees due to excessive planting of inappropriate species,” said Ma. “That was a big lesson.”

Thanks to Sukhgerel Dugersuren of Rivers without Boundaries Coalition for assistance with the interviews.

Asian Development Bank Vice President for Market Solutions Ashok Lavasa delivered a keynote remark at Mongolia Economic Forum- 2023 on 9 July. In his keynote remark, he emphasized the importance of developing the enabling environment for private sector participation and expanding private sector financing to meet growing investment needs for inclusive growth and climate action. Below are some highlights from his speech.

ADB considers its engagement with Mongolia to be of the highest importance. As Mongolia’s long-term development partner, ADB will support Mongolia in its development vision (Vision 2050) to become a “dynamic and modern economy with a thriving middle class by 2050”. Supporting the New Recovery Policy and its six priority areas being the near-term priority (recovery in ports, energy recovery, industrial recovery, urban and rural recovery, green recovery, and recovery in public productivity).

ADB now sees the Mongolian economy as firmly on a path of recovery and in a period of post-pandemic expansion. ADB’s growth forecast for 2023 is 5.4%, and 6.1% for 2024. This trails a solid 4.8% seen in 2022, sluggish growth of 1.6% in 2021, and a contraction of 4.6% in 2020. With exports recently buoyed by higher commodity prices, things are looking brighter for Mongolia. However, vulnerabilities remain.

Mongolia is at the center of the climate crisis, with the growing threat of desertification, storms, forest fires, droughts and severe winters, which can devastate livestock. Energy security and the need for clean energy is a pressing concern.

Supporting the Mongolian economy to be more resilient, diversified, and inclusive is a key objective of ADB. Overall, ADB’s support since Mongolia joined ADB in 1991 has totaled more than $4 billion, and today, our active portfolio stands at over $1.5 billion. ADB’s portfolio peaked in 2020 at close to $2 billion, as we scaled up support to assist Mongolia in its COVID-19 response, including the provision of urgent assistance for social and health needs.

Financing public infrastructure is at the heart of ADB’s operations. While Mongolia has made significant progress in building public infrastructure, faster growth continues to be held back by a major infrastructure gap.

Public sector financing can only stretch so far. Governments throughout the world are increasingly fiscally constrained and debt levels can only rise so far. Finding ways in which to attract private sector financing is therefore critical.

ADB is committed to supporting private enterprise and working with the government in creating a conducive environment to further boost private investment.

ADB is currently undergoing an organizational change that places greater emphasis on expanding its own greater mobilization of private sector resources. Our goal is to scale up private sector operations to one-third of all operations in the coming years.

The goal of ADB’s private sector operations is not to compete with or crowd-out commercial financing, but to crowd-in investment and financing and to close market gaps, with a cofinancing target of $2.50 for every $1.00 of our own private sector financing.

As we look at the financial sector here in Mongolia, we now see more opportunities for green and social financing. Green and social bonds, including gender bonds, represent an emergent opportunity for developing countries to tap international private sector capital searching for responsible investments.

Food security is a priority area of ADB & the Mongolian government and one that was exposed as a vulnerability during the COVID-19 pandemic. Under ADB’s private sector operations, we were able to respond during 2020 by extending liquidity support to sustain businesses during a period of tight credit.

ADB announced a partnership at COP26 to launch an Energy Transition Mechanism (ETM) to accelerate the transition from coal to clean energy. ETM combines concessional and competitively priced market funds as a low-cost financing package that incentivizes early retirement or repurposing of coal-fired power plants. We aim for this to be a new model for acceleration of coal plant retirement across the region, with the goal of a massive reduction in carbon dioxide emissions.

As Asia and the Pacific’s Climate Bank, ADB’s own ambition is to provide up to $100 billion in climate finance by 2030 across all countries that we operate in. Globally, there are now huge sums of capital looking to support clean energy and climate finance, and Mongolia can take advantage of such capital.

PPPs can actively support energy transition in terms of renewable energy generation, but also in terms of energy efficiency and this is where private sector innovation and the long-term nature of PPP contracts can add significant value through whole-life cost efficiencies.

ADB has been actively looking to support Mongolia with building its PPP pipeline despite challenges. The environment to enable PPPs is advancing positively. The Law on Public–Private Partnership was approved by the Parliament in December 2022 (with the help of ADB and other partners), and next, the government plans to make this law effective, followed by operationalization of its PPP center. Experience shows that these are critical reforms necessary to galvanize PPP transactions. ADB looks forward to continuing to support the development of PPPs by identifying a suitable pilot project that can be used to test the new PPP law.

Creating an attractive investment environment remains paramount. Improved infrastructure is just one part of this.

The banking and financial sector in Mongolia has led the way in its digital transformation, and the public sector has made tremendous in-roads with the launching of the e-Mongolia platform. ADB will continue to support the government and private sector in advancing digitalization, seeking to apply solutions in our operations, including in trade, fintech, education, health, and agribusiness.

In celebration of World Small and Medium Enterprises Day 2023, the Development Solutions NGO, national consultant for the Strengthening Social and Solidarity Economy (SSE) project, engaged with the national advisory committee members and other stakeholders on Mongolia's social and solidarity economy on 27 June 2023.

Bat-Orshikh Erdenebat, Chief Advisor at Development Solutions NGO and lead consultant, informed participants that the project builds on the Resolution Concerning Decent Work and the Social and Solidarity Economy adopted at the 110th International Labour Conference in June 2022 and UN Resolution on Promoting Social and Solidarity Economy for Sustainable Development .

Participants discussed the importance of involving government officials in the national advisory committee to further raise awareness and strengthen the SSE. They noted that there is a lack of awareness of the term “social and solidarity economy” and that not all types of SSE entities exist in Mongolia.

The representative of the Mongolian Employers’ Federation called for a working definition of the social and solidarity economy in Mongolian while maintaining its principles and values. He remarked, “The new resolution on social and solidarity economy needs to be adapted into Mongolian laws and regulations accordingly.”

Staff from Development Solutions NGO disseminated preliminary research findings based on the self-assessment survey of 156 SSE entities. Case studies on selected SSE entities from the rural provinces revealed the challenges and opportunities facing the social and solidarity economy in Mongolia.

The second phase of the Strengthening the Social and Solidarity Economy in Asia Project, funded by the Ministry of Employment and Labor of the Republic of Korea, aims to contribute to strengthened awareness of the SSE’s contribution to decent work and sustainable development and create policy dialogue in five countries in Asia and the Pacific - Cambodia, Kyrgyzstan, Mongolia, Thailand, Vietnam. Mongolia supported the adoption of the UN resolution on SSE and sustainable development.