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The chaos theory of Mongolia

I returned to Mongolia 15 years ago after an absence of 13 years, save for the occasional 2-week leave from work, and that time I spent a semester and a half at a local university drinking endless cups of brown, watery 150 Tugrik instant MaCcoffee at the cafĂ© strangely, or perhaps egotistically, named "In my memory", writing the first and so far the only book that got us into trouble with the local intelligence who apparently had little else to do than to pore through the ramblings of teenagers to catch the tell-tale signs of drug dealery. But I digress. When you visit a country for a short period, be it home or not, you hardly have time to immerse yourself in the spirit of the country and the city and feel the nitty gritty and dirty shiny of it all. So after 13 years, it took me a while to readjust and finally understand what the hometown of my childhood had become.  The most striking, ubiquitous, and inescapable feature was and still, unfortunately, is the traffic. In 2008,

Mongolia to decide on Rio Tinto's Oyu Tolgoi gold, copper project before June

This is the topic that has had many investors following the news worriedly. What will the former commies do in terms of taxation on the mining sector? The Parliament is expected to pass the regulation within weeks, before the June parliamentary elections. What they decide will shape the future for Rio Tinto's $3 billion Oyu Tolgoi project.

A key change in the proposed amendment is a plan to give the government an option to seek a higher, 51% share in strategic projects, as opposed to 34% now, said Bold Luvsanvandan, chairman of the Mineral Resources and Petroleum Authority of Mongolia.
Strategic projects are defined as those with revenue exceeding 5% of Mongolia's gross domestic product, which currently is around $3 billion. >>Read full article
So the Oyu Tolgoi can and should be classified as a stategic project. In December 2007, the PM Bayar announced that the government will take control of the privately-held Tavan Tolgoi coal mine project, worth an estimated $2 billion. While this sudden wave of nationalistic and protective measures by the Mongolian government may dampen the investors' interest in Mongolia, it is probably a necessary move. Time to pull the brakes on the "gold rush" craze. So long as the natural resources are there, there will always be buyers and investors. Plunder it all and we'll be left with craters the size of mountains, with our rivers polluted with cyanide and mercurial water.

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