Teams of top managers from Japanese companies arrived in Mongolia. In particular, a team of top managers led by Akira Saito, East Asia Director of Itochu Corporation, was received by the leaders of the Mongolian Chamber of Commerce and Industry. The sides exchanged views on cooperation.

A Japanese business group is studying the Mongolian business environment. The group expressed a desire to import products from Mongolia to Japan during the meeting.

President of the Mongolian Chamber of Commerce and Industry Amartuvshin Otgondavaa named mining and non-mining industry products suitable for export from Mongolia to Japan. Special attention is paid to meat, wool, cashmere, leather, pine nuts and green energy.

China's Inner Mongolia autonomous region confirmed two bubonic plague cases on Saturday, according to the local government.

The two new cases were the husband and daughter of the previous case confirmed on Aug 7, the government of the Sonid Right Banner in Xiliin Gol League said on its official website on Saturday night.

The cases' close contacts have all been brought under quarantine and have not shown any abnormal symptoms as of Saturday.

The major forum of the mineral sector, "Mongolian Mining Week 2023" will be held for the second year in Ulaanbaatar on October 9-13.

The event to be organized jointly by the Ministry of Mining and Heavy Industry and the National Mining Association of Mongolia will discuss the policy reforms of the sector and the reform of the investment environment, which are included in the "Vision-2050" development document and the "New Revival Policy" implemented by the Government.

Last year, for the first time in Mongolia, participants from all levels of the mineral sector gathered for five days to stimulate the development of the industry, attract foreign investors, support domestic enterprises, and add strength and leverage to Government policies. They discussed many pressing issues of the sector with the participation of all level organizations to determine the competitiveness of the industry, develop products that meet global trends and market demand, ensure the participation of citizens and communities in the policy decisions of the Government, seek joint solutions, restore a favorable investment environment, and accelerate legal reforms, and determined the direction.

The Ministry of Mining and Heavy Industry reports that their policy is aimed at supporting responsible mining, consistently protecting interests of law-abiding domestic and foreign investors, cooperate with private sector by giving opportunities and confidence, and raising responsibility, and increasing competitive edge of the sector.

“The period of the Mongol Empire is the most important stage for the formation of the Eurasian civilization. The Mongol Empire contributed to the development of ethno-cultural processes in Eurasia thanks not only to trade, but also to cultural exchanges, leasing of technologies and intellectual interaction between the peoples of Eurasia, as well as the synthesis of nomadic and sedentary civilizations,” underscored Dr. Oleg Lushnikov, Director of the Center for Eurasian Research of Russia in his presentation “The Great Mongol Empire as the World-System of the Middle Ages and Its Contribution to the Foundation of Eurasian Integration” at XII International Congress of Mongolists in Ulaanbaatar, Mongolia.

“The period of the Mongol Empire is the most important stage for the formation of the Eurasian civilization. It was a very large-scale integration process covering the entire period of Antiquity and the Middle Ages. For us it is also the foundation as to formulate certain basic principles of the Eurasian integration in the 21st century. At present, the world-system approach is the most promising methodology for describing large-scale historical processes, for identification and explanation of the patterns of economic and political cycles. Moreover, it must be mentioned that this paradigm has all the prospects to use a rigorous apparatus of exact sciences for constructing mathematical models of systems of different levels – from mini-systems to the global world-system.”

“The world-system is a set of systems of societies united by close economic ties, acting as specific evolving units, but not always merged into a particular political formation. Trade communications connect different regions and cultures, and form a common macroeconomic area. Even more changes occurred after the crusades and the rise of the Great Mongol Empire in the XIII century. Thus, we can speak about the creation of the "Eurasian world-system ".

“The Mongols formed a largest ancient network of trade and economic routes from China to Europe, the Silk Road. They contributed to the growth of transcontinental trade, the influx of innovations in Europe, and the inclusion of India in closer relations with other parts of the world-system (due to the Islamization in the era of the Great Moghuls and the growth of the East-West spice trade). The Pax Mongolica crisis and the disintegration of the Mongol Empire resulted eventually from the Black Death pandemic and the formation of the Ottoman Empire that had blocked the Levantine spice trade. Those factors facilitated the search for sea routes to India and the development of new technologies and mercantilism, a precursor of capitalism in Europe, which led to the creation of the “European Center" world-system in the XVI-XIX centuries.”

“Рах Mongolica between 1250 and 1350 was not only trade relations, but also intercultural exchange, leasing of technologies, and intellectual interaction of the peoples in Eurasia. There was a synthesis of nomadic and sedentary civilizations.

The culture and science, the literature and art of the peoples of the Mongolosphere had been further developed. Medicine, history, mathematics, astrology and science prospered in the cities of the Mongol Empire. Moreover, Muslim doctors and astronomers from Iran worked at the Yuan court in Khanbalik, and Chinese experts transferred their knowledge to the peoples in the Middle East. Persian miniature and Yuan painting occupy a special place in the imperial cultural heritage. Prestigious products manifested the imperial culture most vividly as well as the nobility's clothing: costumes, paizis, waistbands, weapons, horse harness, accessories, and even hairstyles.”

“In general, it is plain to see the magnificent culture of the Mongol Empire absorbed the traditions of the cultures of all the imperial peoples, all the richness of the steppe nomadic (Mongolian, Kipchak, Kimak, et cetera), Muslim (Bulgar, Khorezm, Iranian), Central Asia and Far East elements of material and artistic culture,” noted Dr. Oleg Lushnikov.

XII International Congress of Mongolists is convening for the third day today in Ulaanbaatar and will be closed tomorrow evening.

Fossils are found everywhere around Wyoming, but finding a Mongolian dinosaur in a Cowboy State rock shop is unique.

And illegal.

The U.S. Department of Homeland Security held a repatriation ceremony at the Library of Congress in Washington, D.C., this week to return a collection of Mongolian fossils to that country. One of those fossils was the rare skull of a Tarbosaurus bataar, a Tyrannosaurus relative found in a Wyoming rock shop.

Thomas Holtz, Ph.D., is the principal lecturer on vertebrate paleontology at the University of Maryland and one of the world's foremost experts on Tyrannosaurus and its relatives. While thousands of miles part, Mongolia and Wyoming are both sparsely populated and rich in dinosaur fossils, he said.

"Mongolia regards fossils as part of their national heritage and not as minerals or trophies to be extracted and sold,” he told Cowboy State Daily. "Its huge size and low population make their territories hard to patrol. So, they still suffer from poaching of their natural resources.

"Thankfully, the last decade has seen a pattern where law enforcement, customs officials, and scientists around the world are more diligent so that stolen fossils might be returned to Mongolia.”

So how did a smuggled Mongolian fossil end up with a price tag in Wyoming?

A complete Tarbosaurus skeleton. This specimen was sold by Heritage Auctions for more than $1 million before becoming the object of United States v. One Tyrannosaurus Bataar Skeleton, a contentious case that ultimately decided to void the sale and return the skeleton to Mongolia.

Homeland Security Investigations hasn't shared much information on any of the fossils. But when the agency got word that a Tarbosaurus skull was on display in a Wyoming retail shop, it launched an investigation.

Tarbosaurus is a meat-eating dinosaur so similar to Tyrannosaurus rex, it was once thought to be a different species of the same animal. Both lived during the Late Cretaceous Period in Asia and North America, respectively.

Several Tarbosaurus fossils have turned up in the United States, but all have been returned to the people of Mongolia, usually accompanied by criminal charges for those responsible for smuggling or selling the fossils.

The provenance of this Tarbosaurus skull hasn't been disclosed, but it definitely didn't belong in a Wyoming shop. The only explanation officials have given is that the fossil had been illegally smuggled out of Mongolia.

In 2012, investigators began a cultural property investigation to look into the Wyoming skull. Earlier that year, Homeland Security in New York initiated its own investigation after learning a U.S. auction house was planning a sale of Mongolian fossils.

Investigators in New York, Wyoming, and Arizona collaborated on 12 investigations to seize several Mongolian fossils and prosecute those responsible. The Tarbosaurus skull in Wyoming was included in the seizure.

Other fossils seized through the investigations include complete skeletons of Tarbosaurus and Gallimimus (the ostrich-like dinosaur that appears in “Jurassic Park”), a skull from the duck-billed hadrosaur Saurolophus, and several dinosaur nests and eggs.

At least one person pleaded guilty to criminal counts of illegal importation of dinosaur fossils.

An Important Fossil

The repatriation ceremony included the first public display of the incredible specimens, including the Tarbosaurus skull. But one of the more significant specimens on display was the skull of Alioramus, another Mongolian relative of Tyrannosaurus.

Homeland Security calls the skull "one of the best-preserved fossils ever found" of the 70 million-year-old dinosaur.

Holtz is happy this rare specimen will be returned to Mongolia, where it will be available for scientific research. Tarbosaurus fossils are more common, but even common fossils have enormous scientific potential.

"Alioramus is still only poorly understood," Holtz said. “So new fossils will help us to better understand the anatomy, ecology, and evolutionary relationships of this distinctive dinosaur. And while Tarbosaurus fossils are more common, their abundance means we can study this dinosaur in more detail to understand its biology."

The skull of the Tyrannosaurus relative, Alioramus. Now that this skull, “one of the best-preserved fossils ever found” of this rare dinosaur, will now be available for paleontologists to study as they learn more about the tyrannosaur family tree.

Fossils from Mongolia's Gobi Desert are legendary for their exquisite preservation.

Dinosaurs were frequently unexpectedly buried in sandstorms or under collapsing dunes. The sudden death and immediate burial led to phenomenal preservation.

The beauty of Mongolian fossils also makes them desired by international collectors. Despite international law, specimens have been illegally excavated, smuggled out of Mongolia, and sold on the black market or through private vendors.

Dinosaur eggs are among the most common Mongolian dinosaur fossils that show up for sale. The first dinosaur eggs ever found were discovered during a 1925 expedition to the Gobi Desert by the American Museum of Natural History in New York, New York.

Author Paige Williams published “The Dinosaur Artist: Obsession, Betrayal, and the Quest for Earth's Ultimate Trophy,” a book about a similar situation where a Tarbosaurus skeleton was auctioned off in the United States before being seized and returned to Mongolia.

While these dramatic cases of fossil seizure make great stories and headlines, Holtz says many people are being proactive by willingly returning fossils to Mongolia.

"While this case required the intervention of law enforcement, there have been several cases of voluntary Mongolian fossil repatriation, where the buyer wasn't aware of the illegal status of their purchase and were convinced that the right thing to do was to return these specimens to the nation to which they belong," Holtz said.

In the US, Finders Keepers

In the United States, while there are strict laws regarding fossils found on public land, any fossils found on private land are the property of landowners. They can choose to do anything they'd like with their property, which is why so many dinosaurs and other fossils found in Wyoming end up in museums and private collections in other states and nations.

Unlike the United States, Mongolia has patrimony laws that declare all fossils found in the nation rightfully belong to the people and government. Because of this, it is illegal for any fossils to be exported from the country without permission.

And all the fossils in the repatriated collection were illegally imported into the United States, and each was either part of a private collection, on the auction block, or waiting to be sold.

Several American T. rex fossils have taken up international residency, but Mongolian Tarbosaurus fossils belong in Mongolia. And the U.S. government says it will ensure all Mongolian dinosaurs find their way home, even if they end up in the wilderness of Wyoming.

Andrew Rossi can be reached at: Arossi@CowboyStateDaily.com

The Management and Board of Directors of Erdenes Mongolia LLC, a group of state-owned mining companies, worked at Erdenet Plant and discussed the first half-year 2023 activity report of the plant.

General Director G. Yondon presented the activity report of Erdenet Plant state-owned enterprise for the first half of 2023. He reported on industrial production, basic economic indicators, investment, project implementation, procurement, human resources, social responsibility, occupational health and safety, environment and green development activities.

He also provided detailed information about the implementation of resolutions, decisions and planned indicators of the Government of Mongolia, State Property Policy and Regulation Department, and Erdenes Mongolia LLC.

In the first half of this year, Erdenet Plant fulfilled the plan of the main key indicators of production by 100.0-113.9 percent. Specifically:

• Processed ore 19.5 million tons, 100.0 percent implemenation of the plan,

• Produced 302.7 thousand tons of copper concentrate, 101.6 percent implemenation of the plan,

• Produced 2.97 thousand tons of molybdenum concentrate, 113.9 percent implemenation of the plan.

Although the main production and economic indicators and plans have been implemented in the first half of the year, General Director G. Yondon emphasized in his report that there are many problems related to the current state of Erdenet Plant's operations, construction, investment activities, projects and programs, and proposed solutions, which were submitted to the management team of Erdenes Mongolia. For example:

• Royalty calculation of additional elements of copper and molybdenum concentrate produced by Erdenet Plant creates "unreasonable additional costs",

• Royalty payment is calculated with a large difference,

• Solution of the remaining financing for the extension of the treatment plant,

• Supply the produced energy at a price lower than its cost and buy it at a higher price,

• Difficulties in purchasing relevant equipment in accordance with the technical policy of the factory,

• The contractor of "Urkhaichin-2" District, Urgoo Khaan Construction LLC, failed to fullfil contractual obligations causing detriment to 319 employees who ordered apartments.

During the meeting, CEO of Erdenes Mongolia LLC S. Narantsogt pointed out that the Management and Board of Directors of Erdenes Mongolia LLC will inquire about the first half-year report of Erdenet Plant and the pressing issues that cause difficulties, clarify details, exchange opinions and come up with concrete solutions.

MIAT Mongolian Airlines, the state-owned national airline of Mongolia, and AerCap signed an agreement in May 2023 to lease two 787-9 /Dreamliner/ type aircraft for long-term operation. According to the agreement, the first 787-9 aircraft landed today at Chinggis Khan International Airport.

The second 787-9 aircraft will be received in the first quarter of 2024. The 787-9 is a long-range, wide-body aircraft with full passenger comfort, fuel efficiency, and the latest technological solutions. MIAT ordered 292 passenger seats (30 business, 36 premium, 226 economy).

MIAT plans to fly the aircraft to Frankfurt, Istanbul, and Seoul, and later to the United States.

By spring on central Mongolia’s vast grasslands, the bitter winter snows have largely melted, but strong winds and sandstorms can make this one of the harshest times of the year.

For herder Bayarduuren Zunduikhuu, it is also one of the busiest.

“We wake up as the sun rises,” she says. “Spring is all about the cashmere harvest.”

Like many members of Mongolia’s estimated 300,000 nomadic herder households, Bayarduuren makes much of her income collecting and selling cashmere wool from her free-roaming goats. She combs the animals’ fleeces one by one, teasing out the fine underbelly fibers they molt as the weather warms.

Bayarduuren Zunduikhuu moves home each season looking for land for her herd of 500 animals, including the goats she relies on for cashmere.

Bayarduuren Zunduikhuu moves home each season looking for land for her herd of 500 animals, including the goats she relies on for cashmere.

Dan Hodge/CNN

Prized for its durability and softness, cashmere is used to make luxury sweaters, scarves and blankets. Around 40% of the world’s cashmere comes from Mongolia — roughly 10,000 metric tons in 2021 — according to the United Nations Development Programme (UNDP). Today, cashmere is one of Mongolia’s main exports.

But growing global demand for this luxury wool is taking a toll on the environment and jeopardizing traditional ways of life. As the cashmere market has soared in recent decades, so too has the number of goats grazing on Mongolia’s grasslands. There are now an estimated 27 million of them, meaning they outnumber people in the country by more than eight to one.

Climate change, extreme weather and livestock grazing have combined to leave around 70% of pastureland degraded to some extent, according to the UNDP. This threatens to irreversibly devastate Mongolia’s ecosystems — and the industries that rely on them.

Transparent cashmere

Amid these environmental concerns, some luxury labels are turning to more eco-friendly alternatives. But a new generation of Mongolian designers is looking for ways to make cashmere more sustainable while also supporting local herders.

The process often starts with understanding exactly where — and how — the material is produced, according to Oyuna Tserendorj, who grew up in Mongolia and now runs a cashmere clothing and homeware label.

Goat underhair fibers are spun into yarn, which is then used to make cashmere items such as sweaters and scarves.

Goat underhair fibers are spun into yarn, which is then used to make cashmere items such as sweaters and scarves.

Dan Hodge/CNN

Founded just over 20 years ago, Oyuna is stocked in luxury department stores like Harrods in London and Lane Crawford in Hong Kong. Though she runs her label from London, the designer sources and produces her clothes in her home country.

“We have a very short supply chain. We design our collections, and we work with the factories in Mongolia,” Oyuna says. “And we know which areas and nomadic cooperatives our cashmere comes from.”

Oyuna’s considered approach comes at a premium. While some mass market retailers sell 100% cashmere sweaters for under $80, hers can cost over $1,000.

Luxury labels’ yarn quality, small-batch production and labor-intensive handcrafting processes can account for some of the differences in cost. But sustainable practices also impact garments’ price tags.

Oyuna supports programs the non-profit Sustainable Fiber Alliance (SFA), which helps herders improve their land management, animal welfare and access to the global cashmere market. She only sources from herders that meet SFA’s sustainability standards, even if that means spending more on materials.

Luxury label Oyuna, which specializes in responsibly sourced cashmere, shot a recent campaign on Mongolia's steppe.

Luxury label Oyuna, which specializes in responsibly sourced cashmere, shot a recent campaign on Mongolia's steppe.

Noise Art Media

Making herders’ businesses more profitable may reduce environmental pressures by discouraging overgrazing, according to the UNDP. For instance, processing and manufacturing more cashmere in Mongolia, which currently exports up to 90% of the material raw (long before it becomes yarn, let alone a hat or shawl), could provide them with additional income without the need for more goats. The UNDP suggests that herders could clean and sort the cashmere for local companies directly — and by ensuring their cashmere is not mixed with others, they can also better control the quality and thus charge higher prices.

Yak wool: The new cashmere?

A growing number of labels are looking for ethical alternatives to traditional cashmere. Stella McCartney, for instance, has used only recycled cashmere since 2016. This helps combat waste, with an environmental impact seven times lower than virgin cashmere, the brand says.

Japanese startup Spiber has, meanwhile, developed a spiderweb-inspired synthetic cashmere alternative by fermenting plant-based ingredients into a protein polymer. Athleisure label KD New York has meanwhile produced a fabric with similar qualities to cashmere using soy-based fibers.

These high-tech materials are yet to be widely adopted. But several brands are turning to a readily available cashmere alternative — one that can provide Mongolian herders with an income while protecting their land from degradation: yak wool.

Is yak wool the next cashmere?

01:50 - Source: CNN

Bodios is among the labels betting that yak could be the next big thing. The Ulaanbaatar-based knitwear brand says it produces more than half of its yak wool items — including sweaters, scarves and blankets — in Mongolia.

Yak wool is collected in a similar way to cashmere, as yaks and goats both grow insulating hairs under their woolly fleeces for the winter. The material isn’t as popular as cashmere, in part because the fibers are coarser and darker, making them harder to dye.

But Bodios’ manager Ishbaljir Battulga says that yaks’ grazing habits are kinder on the ecosystem. For example, while goats uproot plants as they eat, yaks only touch the leaves, making it easier for pastures to regrow. They also graze at a higher altitude, meaning they do not contribute to degrading already over-exploited grasslands.

Some experts believe that growing the market for yak wool — also known as yak down — could provide an eco-friendlier source of income for herders in Mongolia. And some Mongolian knitwear-makers are hoping to use material’s comparative rarity (there are fewer than a million yak in Mongolia) as a selling point.

“In terms of softness, the cashmere and the yak down are very close,” Ishbaljir says. “The yak down is warmer … and at the same time, it breathes better.”

Cashmere processing remains relatively rare in Mongolia, which currently exports up to 90% of the material raw.

Cashmere processing remains relatively rare in Mongolia, which currently exports up to 90% of the material raw.

Dan Hodge/CNN

Ulaanbaatar-based boutique studio Hypechase makes yak wool clothing in small batches for its eponymous label, as well as other brands around the world. Founder Adrien de Ville says the material, when left in its natural, undyed colors (which can range from dark brown to gray and white), is gaining popularity among both mainstream and experimental designers, like Antwerp-based Jan-Jan Van Essche.

Less is more?

Despite the growing number of alternatives, global appetite for cashmere clothing continues to swell. Market analyst Grand View Research has estimated that the industry will grow by more than 6% a year until 2030, by which time it will be worth $4.23 billion. But according to Elaine Conkievich, the UNDP’s resident representative in Mongolia, the sector can still grow sustainably if buyers prioritize quality over quantity.

“It’s not about massively increasing the numbers (of garments), but really keeping good quality throughout the value chain, and sustainable practices,” Conkievich says.

Cashmere is prized for its warmth and durability.

Cashmere is prized for its warmth and durability.

Dan Hodge/CNN

“If consumers abroad are looking and saying, ‘OK, this Mongolian sweater, scarf or gloves were produced from beginning to end in Mongolia, it’s benefiting the herder lifestyle and the animal welfare is factored in,’ then that will then bring a higher price.”

How realistic this is, in an age of fast fashion, remains to be seen. For herders like Bayarduuren, however, a more sustainable industry could help her maintain a life on the steppe. It’s something she has previously considered trading in for a job in the city — despite what she describes as a deep connection to nature.

“My parents were herders and I also chose to lead a herder life,” she says. “This way of life has been passed down in my family for generations.”

Mongolia, rich in minerals especially copper and rare earths, but sandwiched between China and Russia, is making a pivotal shift toward a “third neighbor” – the United States. During a recent visit to Washington, Prime Minister Oyun-Erdene Luvsannamsrai aimed to fortify U.S. ties concerning critical minerals and particularly to enhance cooperation in rare earth mining. Additionally, Mongolia and the U.S. brokered an “Open Skies” aviation agreement, intended to bolster direct trade.

Should these agreements be realized and rare earths air-shipped from Mongolia to the United States, what are the implications for China-U.S. strategic competition?

“Chokepoint” Strategy

The China-U.S. relationship has been the world’s most pivotal bilateral dynamic since the end of the Cold War. Recently, competition has taken precedence over cooperation between these two superpowers, with Beijing and Washington jockeying for advantage from trade and technology to control over critical mineral supply chains.

Global supply chains have evolved due to two intertwined factors: advancements in ICT and cross-border logistics, along with the reduction in institutional barriers facilitated by organizations like the WTO. As a result, supply chain management has become crucial for optimizing efficiency, cost-effectiveness, and uninterrupted capital and information flows for both businesses and national economies.

However, supply chains present a paradox: As they grow more complex, weaving in multilayered arrays of suppliers each chosen for their competitive advantages, they also become more vulnerable to external shocks. This includes natural disasters, pandemics, and unpredictable geopolitical shifts. Recent events like the China-U.S. tech war and the economic sanctions on Russia following its invasion of Ukraine highlight the fragility of today’s global supply chains.

In the context of a volatile geopolitical environment, certain chokepoints within supply chains are regarded as potential vulnerabilities. A “chokepoint” denotes a critical and irreplaceable component or link within a supply chain, susceptible to control by potentially adversarial entities. At its core, a chokepoint is characterized by a form of monopoly. While businesses may wield monopolies to achieve heightened economic gains, nations often cultivate them for political objectives. Beyond the establishment of monopolies to create strategic chokepoints, an alternative and more aggressive strategy also exists: targeting an opponent’s chokepoint to intentionally disrupt their crucial supply.

In the competition between the United States and China, both nations are employing chokepoint strategies. To start, the U.S. utilized its dominant position within semiconductor supply chains to exert extensive technological and geopolitical influence. This maneuver effectively curbs China’s progress in advanced chipmaking. China, in response, has implemented its own countermeasures, including export controls of critical metals. These reciprocal actions have transcended the realm of economic sanctions, signifying a broader form of economic warfare between the two powers.

In the midst of these various measures and countermeasures, China holds a wild card: its control over the separation and refinement of rare earths. Presently, China is the sole provider of a continuous, uninterrupted supply of high-energy permanent magnets suitable for high-temperature applications such as electric motors used in EVs.

The Geopolitics of Rare Earths

Rare earths play a crucial role in numerous modern technologies. Specifically, the rapid growth of renewable energy and related technologies, such as electric vehicles, wind and solar energy, spurred a 37 percent increase in rare earths demand in 2022, a trend expected to continue for at least the next five years. Yet, the supply chains for rare earths are mired in geopolitical vulnerability. Notably, China boasts the most substantial natural reserves of all 17 rare earth elements and has cultivated a unique ability to refine and separate each one.

Moreover, since 2012, China has intensified its efforts to move up the value chain. Notably, it has consolidated rare earth mining and processing under state-owned enterprises and established pivotal research centers. Despite commencing patent filings nearly two decades after the United States and Japan, China held more than 80 percent of all rare earth-related patents by 2020.

China is now the largest importer and exporter of rare earths, meaning it controls the bulk of rare earth processing including refinement, separation, and fabricating magnet materials. During the first half of 2023, China imported 90,920 tons of rare earth ores and metals, a substantial portion from the United States, and exported 26,236 tons of refined rare earths, primarily magnet materials. While theoretically feasible, decoupling from China’s rare earth supply chains would involve substantial costs and potentially disruptive supply chain stability.

Beyond just rare earths, China is the leading and most cost-effective supplier of many critical minerals vital for clean energy transition. Given the geopolitical and environmental risks tied to mining and processing minerals, concerns about rare earth supply security have intensified. Recognizing their potential vulnerability to Chinese restrictions, Western governments are actively seeking to level the playing field. This includes seeking to diversify mining sources and building facilities independent of China’s input.

In the face of geopolitical competition between the U.S.-led West and China, more nations, including Mongolia, are gravitating toward the democratic bloc to mitigate risks from China’s dominance in critical supply chains. Reacting to a series of export controls and technology sanctions on semiconductors imposed against it, China has felt compelled to employ reciprocal actions.

For example, Beijing, with precision and deliberation, initially curtailed exports of gallium and germanium – two rare metals integral to the manufacturing of several strategically significant products, including military weapons systems. This move came in the wake of China’s new Foreign Relations Law enacted on July 1, which asserts that the nation may employ countermeasures when facing external restrictions. Moreover, the recent introduction of China’s drone export control policy indicates a potential escalation in these tit-for-tat measures.

In light of China’s countermeasures, the Pentagon is investigating partnerships with U.S. and Canadian companies to recycle rare metals from waste and refine both gallium and germanium. Furthermore, the United States has declared limitations on American investments in China’s tech sector.

Given this backdrop, the Mongolian prime minister’s visit to Washington to discuss potential rare earth collaborations can be seen as bolstering the United States’ position, potentially tipping the balance of power in this geopolitical tug-of-war.

Can Mongolia’s Rare Earths Diplomacy Shift the Power Balance?

The potential rare earth partnership between the United States and Mongolia holds promise for mutual gains. For the U.S., the collaboration could serve to diversify its sources of rare earths. Meanwhile, Mongolia stands to benefit from expanded diplomatic ties and potential U.S. investments that could fuel its economic growth. However, as with any international relationship, the devil is in the details.

Several significant barriers cast shadows over the potential partnership. First, the economic viability of mining rare earths, which come in oxide concentrations ranging from 1 percent to 70 percent, is far from guaranteed. Uncertainties persist regarding the quality of Mongolia’s rare earth reserves and the requisite investment for extraction and processing.

Second, Mongolia may face domestic opposition to rare earths mining operations, which come with a heavy environmental cost. Across its entire value chain, this process consumes substantial energy and water resources while generating various wastes and pollutants, including toxic mining residues, wastewater laden with heavy metals, radioactive waste, and air pollutants such as carbon dioxide and sulfur dioxide. China learned this lesson the hard way: Reports indicate that it could take anywhere from 50 to 100 years for the environment to fully recover in a county in Jiangxi Province where heavy rare earth deposits are rich. The estimated price tag for this restoration is approximately 38 billion yuan, equivalent to around $5.5 billion.

Third, the absence of critical infrastructure in Mongolia, including adequate roads for transporting heavy machinery and reliable electricity, compounds the challenges. Ironically, Mongolia’s best hope for addressing this situation is China. The two countries have agreed to cooperate on a variety of infrastructure projects, including cross-border railways, trade ports, and roads and highways.

Lastly, Mongolia’s landlocked status leaves it reliant on road transport to reach the nearest Chinese ports for global trade. While the “Open Skies” aviation agreement offers an alternative, the cost of air shipping minerals can easily negate any economic benefits. Additionally, the agreement’s implementation depends on the consent of either China or Russia, as their airspace must be crossed for flights to proceed.

Therefore, though bolstered ties between the United States and Mongolia could be disadvantageous for China geopolitically, Mongolia’s pivot seems more symbolic than rooted in economic pragmatism. The potential drawback of this shift is that it could jeopardize the existing cooperation between China and Mongolia. China remains the most significant destination for Mongolia’s mineral exports, including copper and coal. Should Mongolia decisively tilt toward the West, Mongolia’s exports could face constraints.

Conclusion

As China-U.S. tensions escalate, other countries often feel pressured to align with one of these superpowers. Smaller countries have less weight in shifting the China-U.S. dynamic than larger ones, and nevertheless their decisions reflect shared geopolitical anxieties. As pointed out by Oyun-Erdene, countries like his own could suffer greatly if superpower competition boiled over.

In the race against time to combat climate change, global unity rather than fragmentation is the need of the hour.

GUEST AUTHOR

Marina Yue Zhang

Dr. Marina Yue Zhang is an associate professor at the Australia-China Relations Institute, University of Technology Sydney (UTS: ACRI). Marina is the author of three books, including “Demystifying China's Innovation Machine: Chaotic Order,” co-authored with Mark Dodgson and David Gann (Oxford University Press, 2022).

Barkhas Buyandavaa would rather be working anywhere else. Shirtless and covered in black dust, he is trying to fix his 42-wheeler truck by the roadside in the middle of the southern Govi steppe in eastern Mongolia.

“I know coal is bad, but I have no choice. This is the only way to earn a decent living,” said the independent trucker, who transports coking coal on contract for a mining company.

If he were working elsewhere, he would earn three to four times less than he does now.

“I am only working to save some money to go abroad, and then I will quit,” the 32-year-old said. “Most likely Europe.”

Since 1990, Mongolia has transformed from a Soviet Union-style communist state into a vibrant democracy, tripling its GDP per capita and reducing poverty by more than half, largely thanks to agriculture, livestock and mineral resources.

While the world is cutting down on coal – the most polluting fossil fuel and the single largest source of global carbon emissions – Mongolia is ramping up production.

Mongolia produced 32.3 million metric tonnes in 2021. Last year, it increased by 22%, catching up with its pre-COVID-19 levels, the World Bank said in April.

Coal provides more than 90% of land-locked Mongolia’s electricity demand, among the highest proportions in the world, according to energy research organization Ember. It also accounts for 30% of its exports.

Government officials have been vocal about their need to use “this window of opportunity … to be able to export as much coal as we can,” then-Deputy Mining Minister Batnairamdal Otgonshar said last year.

Even the country’s environment minister says the country needs coal for the next five to 10 years.

“As you know, due to the Ukraine-Russia war, the natural gas prices have increased … and even countries like Germany have gone back to the use of coal,” Bat-ulzii Bat-Erdene told RFA.

“Mongolia is completely dependent on coal for income and heating solutions in the winter. Fully phasing out coal is almost impossible in the near future.”

‘Mine-Golia’

Mongolia shares a 4,700 kilometer-long (nearly 3,000-mile) border with China, which is the world leader in renewable energy but burns more coal than the rest of the world combined. It consumed an all-time-high 4.5 billion metric tonnes of coal in 2022, and is set to burn more in 2023.

Customs data show that Mongolia’s coal exports jumped 135% to $6.5 billion in 2022 and 94% of that went to China.

Chinese leader Xi Jinping made clear in July that China would reduce emissions at its own pace and would not be influenced by external factors. It aims for emissions to peak in 2023 before slowing down to reach net zero by 2060.

In the meantime, Mongolia - dubbed “Mine-Golia” - is primed to meet a growing demand. The vast country has proven coal reserves of 33.27 billion metric tons - equivalent to about one-thousandth of annual production.

Some 5% of its landmass is covered by more than 2,700 valid mining licenses. It is one of the few countries in the world which still has large coal power projects in the pipeline.

According to various government and private business estimates, its exports could reach 70 million metric tons annually by 2025.

Mongolia plans to establish more round-the-clock border checkpoints and transportation links to China to facilitate more exports. It recently opened a 233-kilometer (145-mile) direct rail line from the Tavan Tolgoi mine to the Gashuun Sukhait border crossing to China’s Inner Mongolia region.

View from the open pit

Tens of thousands work at open pit mines in Tavan Tolgoi in southern Mongolia, one of the world’s largest coking and thermal coal deposits, with 7.5 billion metric tons of reserves.

Davaadorj Sandagdorj, a supervisor at a provincial government-owned mine there, said it provides critical employment for locals.

“We are not doing it out of choice but due to lack of it. Coal mining has helped us improve our situation,” said Davaadorj, whose parents were miners.

Despite being worried about the environment, “there aren’t many options available for us,” the 45-year-old said atop an open pit, where about 300 miners work.

Last year, a huge anti-corruption demonstration in the capital Ulaanbaatar forced the government to act against a state-owned coal company that operates in Tavan Tolgoi. High-ranking officials were allegedly implicated in illegal coal smuggling to China.

The opposition Hun party estimated the potential revenue loss to be around 40 trillion Mongolian tugriks (US$13 billion).

Experts say mining is one of the main reasons for water, soil and air pollution and degradation in Mongolia, directly impacting herders and their livelihood in the steppe, a semi-arid grassland.

A case study from two mining sites published in April found higher rates of soil erosion in the vicinity of the mines and adjoining industrial areas.

Hard life on the road

Barkhas, the contract driver, mostly drives on unpaved desert roads, rutted from the tires of heavy trucks that can carry up to 100 tons of coal at a time. He drives for weeks at a time. The heavy loads and road conditions mean his top speed is only 60 kilometers per hour (35 mph).

“This is a hard life. The worst thing is for the truck to break down in the middle of the desert,” he said, adding he is worried about losing his job.

“If coal exports stop, tens of thousands of people will lose their livelihood,” he said. “There isn’t enough work in the city, especially for the kind of money we earn.”

Another truck driver ferrying coal from Tavan Tolgoi to the border said he would choose work that was less damaging to the environment, if he had a choice.

“At this point, most youths have only two options: mining or going to South Korea to do manual labor,” he said. “We are of course worried about the environmental mess. This is a beautiful land, but it’s ugly now.”

However, the main threat to his country is actually from China, the 57-year-old said, speaking on condition of anonymity due to his transport company’s policy against speaking to the media.

“China is too powerful, he said. “They want to buy everything as cheap as possible.”

He acknowledged that there is little Mongolia can do about that.

“They are playing with us and our salaries are dependent on China.”

Edited by Josh Lipes and Mat Pennington.