Mining Minister D. Zorigt has told Reuters
that the future of the Mongolian economy will ultimately hinge on
its ability to transcend mining. “It is our ultimate belief that economic
prosperity is not delivered by one particular industry or one particular
resource. Economic prosperity and economic growth are actually made possible by
the skill-sets of the people.”

He has confirmed Mongolia will keep
full ownership of Tavan Tolgoi, amid intense foreign interest and speculation
about its plans for the project. He also indicated that the world”s largest
untapped coking coal deposit was likely to finally go
ahead in 2012. “A state-owned company is going to own 100 percent of Tavan
Tolgoi and license the mining operations. It will be a 50 percent state-owned
company, and the rest will be sold publicly”, in a domestic share
offering.

Zorigt was reiterating a decision made
earlier this year, and his comments could help quell speculation the government
might change its mind. He said the government had already announced it was open
to bids from “fee-based” mining operators across the world to help
develop the project. “We certainly believe the decision to maintain
control will give us a chance to create a national flagship company that will
be a player in the region and a leading player globally,” Zorigt said.

But Mongolia has not completely ruled
out foreign ownership at Tavan Tolgoi. He said, “The second portion of it
— in due time we are going to have bidding by international investors, but
that will be done in conjunction with other aspects of the project,
particularly transportation issues.”

Investors have suggested the decision
to give priority to a rail route running east, enabling the coal to be shipped
to Russia and the Pacific coast, at a time when funding was already available
for a rail line to the Chinese border, was motivated by concerns about Mongolia”s growing dependence on
China, but Zorigt said it was the country”s dependence on unprocessed raw
materials that was the chief concern.

“It is driven by … the logic of
economic growth,” he said. “Certainly when it comes to the resources
of the south, while we are aware that most of it will go to the markets in
China and northeast Asia, a significant portion needs to be delivered to
industrial production in Mongolia itself, and that”s why the railway decision
has been made.”

Analysts have suggested the decision
to cancel the auction at Tavan Tolgoi was partly a response to accusations the
government had sold resource rights cheap to foreign firms such as Ivanhoe
Mines, the majority stakeholder in the country”s other flagship mining project
at Oyu Tolgoi. “There are debates about the economic benefits of the
project, but I can only say that Mongolia is an open and free country and
everybody is entitled to his or her views,” Zorigt said.

“Our conviction is that the (Oyu
Tolgoi) project is going to be a very significant one that will drive the
growth of the country for the next decades.” Mongolia, dubbed
“Minegolia” by analysts, “is a big country and one of the last
remaining places in the world where more big discoveries can be made in the
coming years,” Zorigt said.