What does the country of Mongolia bring to mind? Does it evoke ideas of Genghis Khan and his marauding men, the vast Gobi desert, a nomadic people, a backward communist society or a land rich in minerals?
As the value of traditional currencies around the world takes a nosedive, people are looking to gold and silver as a safe investment. Mongolia has copper and gold mines which will supply the country’s GDP, gross domestic product, in the coming years, if pundits are right. One mine, featured in a televised BBC report, will supply a third of Mongolia’s GDP for the next 50 years. With a population of around 3 million, Mongolia could be in for an extended period of “boom.”
Mongolia split from its communist partner Russia in 1990, bringing in political and economic reforms. Russia turned the screw, withdrawing Soviet support. Widespread poverty and unemployment followed but the tide is turning and Mongolia could experience a gold rush of Californian proportions.
In 2011, Business Insider reporting on Mongolia wrote, “For now the ramping up of mining developments remains on track. The IMF now expects nominal GDP to real reach MNT16.6tn in 2013, twice the 2010 level of MNT8.3tn. Coal exports are expected to reach 27.6m tons in 2011, up from 16.6m tons in 2010 with production of 41.6m tons expected in 2013. If coal is for now making the running, copper will take over in 2013 with the then anticipated commencement of production in 2013 of the Oyu Tolgoi (OT) field. Mongolia also is rich in gold, oil and assorted “’rare earth’ plays.”
Pundits were correct in their assessment and Mongolia is an emerging economy with an incredible amount of wealth.
Mongolia covers an area around twice the size of Texas, 1.5 million square km. The country experiences extreme temperatures in summer and winter. It is a landlocked country, overshadowed by one huge neighboring country, China. Its other important neighbor is Russia. A less populated country than China and lacking in natural mineral resources, Russia must surely eye Mongolian reserves with more than a touch of envy? Then there are western countries all greedy for gold and other minerals.
As all countries attempt to bolster gold reserves could Mongolia be a sitting target?
The televised Mongolian report was interesting. People away from the cities still embrace the nomadic life, herding camels and relying on that animal as a food source. Urbanization and climate change have, however, taken a toll on traditional Mongolian life. A gold rush may herald its end.
Traditional Mongolian tents, yurts and gers, are home to these people. A Wikipedia yurt description says “The structure comprises a crown or compression wheel usually steam bent, supported by roof ribs which are bent down at the end where they meet the lattice wall (again steam bent). The top of the wall is prevented from spreading by means of a tension band which opposes the force of the roof ribs. The structure is usually covered by layers of fabric and sheep's wool felt for insulation and weatherproofing.”
One family was featured watching satellite television from inside their yurt and a modern motorbike was propped outside, but, other than those two items, life had changed little. This traditional way of life though is under threat, mainly from urbanization and climate change.
Could it also be under threat from greed and a foreign gold rush?