GOVERNMENT reforms, proposed new infrastructure projects and improving market conditions in resource-rich Mongolia are helping attract mining companies back to the market.
Mongolia’s vast mineral and energy resources, particularly at Oyu Tolgoi (OT) and Tavan Tolgoi mines, are well known. Both fueled much of the country’s early double digit growth, before falling commodity prices and investor confidence coupled with macro-economic factors curtailed growth and activity.
Austrade’s Senior Trade Commissioner for Korea and Mongolia Amanda Hodges said the recently appointed government was implementing changes to restore investor confidence and enhance the mining sector. “The new government, led by the Mongolian People’s Party (MPP) elected in mid-2016, has been focused on diversifying Mongolia’s investment and trade partners.
“Projects such as Mongolia’s new airport, due for completion in 2017, are rejuvenating interest, given the significant foreign investment. Financing is being provided by Japan’s Bank for International Cooperation while South Korea’s Samsung C&T Corporation is operating as general assistant executor of the project.
“Other key projects include various road and rail projects and a fifth power plant for Ulaanbaatar. With current supply at full capacity, a power station based at Tavan Tolgoi (coal mine) would help reduce the dependence of OT on China for power.”
Amanda Hodges said these activities and the proposed public-private partnership project list being developed would potentially open increased opportunities for Australian businesses to consider.
There are many Australian businesses operating in Mongolia, especially Australia’s world-class METS companies. An estimated 200 Australian businesses have already provided services valued at more than $US83 million to the OT mine. OT is a strategic partnership with Rio Tinto, a significant shareholder, who earlier this year announced its commitment to invest US$5.3 billion in Stage II.
Amanda Hodges said this investment was expected to present additional business opportunities for Australian METS suppliers, particularly in niche areas and in the provision of high-tech equipment and machinery. Rio Tinto aims to make OT a world-class operation by introducing world’s best mining practices in workplace health and safely, skills and training development, and create more than 5000 skilled jobs. This could create opportunities for Australia’s education and training providers.
“Australia has maintained a strong education relationship, with more than 20 years of Australian government post-graduate scholarships. There is also potential to develop academic and commercial linkages between Australian and Mongolian higher education institutions,” she said.