Mongolia has signalled it is willing to help Russian President Vladimir Putin cement new gas supply routes to the East as international sanctions bite.

Javkhlan Bold, Mongolia’s finance minister, said policymakers hoped to capitalise on opportunities that would see more infrastructure running through the country as the Kremlin redirects its energy supplies towards Asian countries like China and India.

In an interview with the Telegraph, Mr Bold said he was hopeful that the so-called Power of Siberia 2 pipeline transporting gas between Russia and China through his country will make progress in the coming months, adding that it was important that Mongolia explored new partnerships going forward.

“Our end goal is to get some revenues for letting [the Power of Siberia 2 pipeline] pass through Mongolia and to some extent we can also become buyers,” he said.

Mongolia buys almost all its gas from Russia, and Mr Bold said the government stood ready to engage with Moscow and Beijing on future projects.

The original Power of Siberia gas pipeline runs directly into China through the country’s northern border with Russia.

Mr Bold said shunning further opportunities would not make economic sense, despite Mr Putin’s decision to invade Ukraine.

“[Russia] still has options if Mongolia says no to the gas transit opportunity. It has access to the Chinese market via Vladivostok for example. And therefore does it make sense to say no to this revenue opportunity?”

Mr Bold added: “We would be open to more opportunities because Russia has a back-up plan if we say no.”

Mongolia is heavily dependent on coal exports and is seeking to diversify its revenue streams as more countries – including China – set net zero goals.

A squeezed outpost of democracy between China and Russia, the country has tried to maintain a neutral stance throughout the war.

The landlocked country no longer imports goods from Ukraine that used to come through Russia, which has pushed up prices.

Mr Bold said he hoped to build stronger ties with Beijing in the years ahead, even though he described China’s recovery after it ditched its zero-Covid policies as disappointing.

However, he added that the country’s dependence on the world’s second largest economy had helped Mongolia to avoid a post pandemic “disaster”.

“If China’s borders remained closed and we had a war, we wouldn’t have imagined what disastrous effect that would have had,” he said.

Moscow has been pressing for a new Sino-Russian pipeline through Mongolia, though Chinese policymakers have been dragging their heels during talks to finalise the pipeline, a move that analysts say could help Beijing secure a lower price for gas as Mr Putin’s options continue to narrow.

BY: Szu Ping Chan

IRENA, in collaboration with the Ministry of Energy of Mongolia, is holding a workshop on 29 August 2023 in Ulaanbaatar. The workshop will be a platform to launch the publication, “Strategic Heating Plan for Mongolia: Integration of Renewable Energy Solutions in Heating Systems”, which is a techno-economic assessment on developing renewable energy-based heating systems in Mongolia.

Geothermal energy, in combination with other locally available renewable and waste energy sources, can contribute to the achievement of Mongolia’s clean heating and climate objectives. District heating systems are a key infrastructure that can enable the deployment of renewables such as geothermal energy – which are usually distributed across cities – in the decarbonisation of the heating sector. Mongolia has a high penetration of district heating systems, which account for about 55% of the heat supplied in Ulaanbaatar. It also has a significant renewable energy resource which can be deployed in the heating sector.

Building on the findings and recommendations of the Strategic Heating Plan for Mongolia, the workshop in Ulaanbaatar on the 29th August aims to stimulate discussions on the measures that Mongolia could next implement towards the realisation of cost-efficient renewable dominated district heating systems.

A contract between the Mongolian government and private space and technology giant SpaceX to avail the firm’s Low Earth Orbit (LEO) Starlink internet service has drawn a suspicious reaction from Chinese citizens.

The commentators and bloggers point to Elon Musk’s firm’s involvement in providing high-speed data services to the Ukrainian army and fear that while China is another US rival, SpaceX’s activities could similarly threaten China’s security.

An article in Asia Times also anticipates Starlink offering an alternative internet service to Chinese citizens other than the ‘Great Firewall’ since the signal cannot be limited to a particular geographical area. This is because international internet services are banned in the country for security reasons.

However, a Chinese defense and foreign affairs commentator EurAsian Times spoke to pointed to a different view in Beijing about Starlink. The issue has more to do with the LEO placement of the satellites that pose a physical danger than a tool that the US might use to challenge China militarily.

Moreover, big businesses’ reluctance to be drawn into geopolitical rivalries with China, as was evident from statements from Musk himself, Microsoft founder Bill Gates and Dutch lithography machine maker Peter Wennink, also worked in China’s favor.

Chinese Netizens Raise Scare

The report backgrounded the recent issuance of a special license by the Communications Commissions of Mongolia to SpaceX and Starlink to provide internet services in the country.

The decision, part of the country’s ongoing digital transformation and New Recovery Policy, was announced ahead of the annual Mongolia Economic Forum 2023, held on July 9-10.

“A network of fiber optic cables already provides wide-reaching access to high-speed internet across Mongolia,” Minister for Digital Development and Communications Uchral Nyam-Osor said on July 7. “But Starlink’s technology will provide greater access to hard-to-reach areas of the country. Herders, farmers, businesses, and miners living and working across our vast country will be able to access and use information from all over the world to improve their lives,” the minister said.

It points out that Chinese nationals currently cannot access foreign internet services or certain banned websites and have their domestic internet usage monitored by the Great Firewall Project (GFP) and the Golden Shield Project (GSP).

Quoting a vlog by Shanghai-based commentator Shen Jiesen, the argument is made that Starlink cannot “sharply” restrict internet in one area while providing it in another contiguous area, as the “network capacity can easily spill over to nearby places.”

Chen says even if Starlink promises not to cross the line, it has already planned to provide services in Mongolia and Pakistan, neighbors of China’s Inner Mongolia and Xinjiang regions. He writes if destabilizing social events happen in either neighborhood, the related news may influence people in China through Starlink’s services.

He also says that, with Starlink’s autonomous services, countries that use them cannot opt to shut down internet services in such situations. Other commentators have noted that Starlink’s dual-use satellites could threaten China’s information and national security, especially during wartime.

With 32 countries adopting its services provided by more than 4,000 satellites in LEO, Starlink plans to boost that number to 42,000 by mid-2027. The PLA Daily, the military’s official publication, warned against the internet service in a May 2022 article, saying it has a deep background related to the US military,” the report said.

“One of its launch centers is located inside the US Vandenberg Air Force Base, and it tested a secure connection between its satellites and the US Air Force’s fighter jets.” The article said Starlink’s satellites could provide the US military with satellite-enabled remote sensing, communication, navigation, and positioning capabilities.

China Already Leads In Communications, Citizens Not Missing Anything

China has pioneered 5G technology, with Huawei having contracts in many Belt and Road Initiative (BRI) countries, including US allies like Israel and UAE. It recently tested 6G speeds in January 2022, and April this year, launched a satellite to that effect in 2020. It even launched its first LEO-based internet satellite on July 9 from the Long March 2C rocket.

Thus China has domestic alternatives and certain rare cutting-edge communications technology options to offer its citizens to prevent them from considering foreign services. ZTE, a China-based world leader in communications infrastructure, also recently publicized its contracts within China. A June 7 press release from the firm reported introducing 5G coverage at Tibet’s Zhuonai Lake Protection Station in Kekexili, the highest-altitude World Natural Heritage site.

In other words, according to leading Chinese and defense affairs commentator Zhao DaShuai, this makes Starlink “a threat to China only as a competitor in the emerging space industry.” “National security concerns concerning internet access are overblown,” Zhao said.

Big Businesses Want China

Secondly, big tech tycoons like Elon Musk and Bill Gates have openly warmed up to China, given their massive business interests. In late May, Musk visited China and, on June 1, met Chinese Vice Premier Ding Xuexiang.

A Reuters report suggested that China’s status as Tesla’s second-largest market and biggest production hub is some of Musk’s motivations behind the visit. Gates’ visit to Beijing and meeting with President Xi Jinping was even more publicized, where the Microsoft founder praised China’s efforts in battling poverty and disease.

“Elon Musk has a lot of business interest in China, the Giga factory in Shanghai, and the Chinese battery suppliers are pretty much single-handedly doing the heavy lifting in his business empire. So it’s very unlikely for him to anger the Chinese government,” Zhao added. The Chinese state believes it has leverage over companies like SpaceX if they act against Beijing’s interest.

Chinese, therefore, generally have favorable views of Elon Musk “because he’s not ideological and is seen in China to run against the prevailing narrative in the West,” Zhao says. This leaves the question: what is China’s main concern with Starlink? “It is more related to orbital paths since it’s first come, first serve, and getting crowded up there. Which is why China is planning the Guowang constellation as a rival,” Zhao explained.

BY Parth Satam

Parth Satam is a Mumbai-based journalist who has been covering India’s defense sector for more than a decade. He maintains a keen interest in defense, aerospace and foreign affairs and can be reached at satamp@gmail.com

Mongolia-based Steppe Gold (TSX: STGO) has just announced a US$150 million funding deal to fully finance the Phase 2 expansion of its flagship project ATO gold mine in Mongolia. With expected annual production of 100,000 oz. gold equivalent by 2025 for 12 years, the company says it’s ready to unlock the full potential of its ATO mine and rapidly expand its presence in Mongolia.

Steppe Gold is the only TSX-listed precious metals producer in Mongolia after Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) acquired Turquoise Hill Resources for US$3.3 billion to simplify its ownership in the world-class Oyu Tolgoi mine. Rio now holds 66%, and the remaining 34% is owned by the government of Mongolia.

However, interest in the region is strong. The recent Mongolia Economic Forum, organized by the government of Mongolia and held during the Mongolian “Naadam” holiday, attracted over 45 international investment banks, more than 500 investors, and a total of 2,000 delegates.

In an address to the audience, Rio Tinto chairman Dominic Barton said the mining giant is committed to building its footprint in Mongolia and expressed his optimism about Mongolia’s future. The company has invested US$15.4 billion in Oyu Tolgoi since 2010, as the project looks set to become the world’s fourth-largest copper mine by 2030.

Mongolia is a resource-rich developing country, with more than 80 types of mineral deposits identified across 1,170 registered deposits. The International Monetary Fund identifies Mongolia as one of the most promising of the 29 resource-rich developing countries due to its richness in natural resources. And yet, only 2.6% of its territory is covered by exploration licenses and 1.2% by mining licenses.

Leveraging its border with China, which accounts for over 90% of its mining commodity exports, Mongolia is focusing on improving border points to boost mineral exports under the New Recovery Policy led by the 43-year-old Prime Minister, Oyun-Erdene L., and his cabinet. Foreign direct investment (FDI) has played a significant role in the development of Mongolia’s mining sector, with 75% of current FDI focused on this sector.

As a frontier market with associated investment risks, Mongolia’s authorities have introduced investor-friendly changes over the past decade, making the country a more favourable destination for foreign investment.

Steppe Gold’s origins

Steppe Gold was founded in 2016 by Bataa Tumur-Ochir, a young Mongolian entrepreneur, and Matthew Wood, a seasoned mineral explorer and developer with over 30 years of industry experience.

Bataa, the company’s CEO and chairman, and Wood, a director, have worked together to invest in Mongolia’s mining industry over a decade, maintaining a strong belief in the country for a long period.

Back in 2012, Bataa became one of the youngest CEOs of an ASX-listed company at the age of 26, with Matthew Wood acting as chairman. They have established and developed several mining projects in Mongolia.

Steppe Gold was listed on the TSX in 2018 and, since then, has raised about US$90 million from international and Mongolian investors and management. Throughout this time, the company developed the ATO mine from greenfield project to production stage with over 90,000 oz. of gold produced to date. The second phase of operations is expected to produce over 1.2 million oz. gold equivalent over 12 years and generate a total of US$2 billion in revenue.

Its most recent financing, a US$150 million debt financing deal with top Mongolian financial institutions, which closed in July, will help Steppe meet its next ambitious growth targets. The principal payments will be paid after Phase 2 expansion is in production.

“It has been challenging yet rewarding five years, but with Phase 1 in production and Phase 2 expansion financing secured, we have de-risked the project, and now we are finally well positioned for growth” Bataa said.

Despite being a junior producer, Steppe Gold already has an impressive list of industry-leading investors, including Eric Sprott, Elliot Management, Fidelity and LIM advisors. The management team themselves are significant shareholders in the company, with Bataa now the largest shareholder. The chairman and CEO says he’s proud to have participated in every capital raise since the company’s establishment.

Steppe Gold today is one of the largest employers in the region and is proud to have a strong local presence and support in Mongolia. A strong believer in community engagement, Steppe has provided financial aid to over 1,600 local students over the five years.

New chapter of transformational growth

In June, Steppe Gold closed the acquisition of Canadian miner Anacortes Mining Corp. and its Tres Cruces gold project in Peru. The all-share acquisition adds another 2.5 million oz. gold in indicated resources to the company’s development portfolio as the mine ranks among the highest-grade oxide development deposits globally. Tres Cruces is just 10 km from the world-class Lagunas Norte mine.

The acquisition will expand the company’s reach to an international scale and increase its production potential, Bataa says.

While Steppe Gold isn’t planning any further expansion into South America in the near future, it does plan to invest in Mongolia.

Untapping Mongolia’s mineral potential, in addition to expanding exploration at the ATO land package, where operations currently only occupy 300 hectares of 5,500 hectares, Steppe Gold is also assessing adding to its landholdings. It’s currently assessing about 200,000 hectares of prospective areas in the country.

“Our company has always had a strong focus on Mongolia, and it will remain unchanged as we seek out the many opportunities in the country,” Bataa emphasized. The company has over 350 employees, 99.9% are Mongolian.

To bolster its focus on mining in Asia, Steppe Gold is planning to pursue a dual primary listing of its common shares on the main board of the Hong Kong Stock Exchange. Around 40% of the company’s shareholders are located in Asian time zones.

Upon listing, the company would be one of only a few firms in the mining and precious metals industry on the exchange — something the company believes will be a major competitive advantage as they appeal to a new group of investors looking for opportunities in the sector.

With Steppe’s international management team and skilled local employees, Bataa says the company is enthusiastic about the future. “We are excited about our transformational growth,” Bataa highlighted.

The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by Steppe Gold and produced in cooperation with Mining.com. Visit www.steppegold.com for more information.

Within the framework of the 22nd Meeting of the Joint Committee on Cooperation between Mongolia and the European Union, the Deputy Prime Minister Mr. Amarsaikhan and the Managing Director for Asia and the Pacific at the European External Action Service (EEAS) Mr. Gunnar Wiegand signed the relevant document on establishing the Development Cooperation Working Group.

The Development Cooperation Working Group is an important mechanism for exchanging ideas on the effective implementation of projects implemented under the Multiannual Indicative Programme of the European Union.

The European Union is financing and implementing 33 projects in the priority directions of green sustainable development, democracy and economic development in Mongolia.

At the invitation of the Vice President of the United States Kamala Harris, the Prime Minister of Mongolia L. Oyun-Erdene will pay an Official Visit to the United States of America on August 2-6, 2023.

During the Official Visit, the Prime Minister is going to hold official talks with the Vice President of the United States Kamala Harris, and meet with other high-level officials. As part of his Official Visit, the Prime Minister will visit NASA, the U.S. Agency for International Development, and the U.S. International Development Finance Corporation.

Issues on deepening the strategic partnership relations with the USA, which plays an important role in Mongolia's "third neighbor" policy, and expanding political, economic, humanitarian, and regional cooperation will be topics of the talks. Moreover, the establishment of some bilateral cooperation documents is expected.

The European Union (EU) and Mongolia held their annual Joint Committee meeting under the EU-Mongolia Partnership and Cooperation Agreement, in Brussels on 26 July 2023. The meeting was an opportunity for Mongolia and the EU to reaffirm their partnership based on shared values such as democracy, human rights, the rule of law and the respect of the principles of the UN Charter.

The EU remains fully committed to supporting Mongolia’s Third Neighbour Policy and welcomes Mongolia’s long lasting commitment to multilateralism.

Mongolia and the EU share a common interest in promoting green sustainable development in Mongolia, which is a key objective under the EU-Mongolia Multiannual Indicative Programme 2021-2027 and the EU’s Global Gateway. Mongolia is among the five priority countries with whom the EU has signed a Forest Partnership Agreement as a Global Gateway Flagship in the margins of the COP 27 Climate Change Conference in November 2022. Mongolia and the EU agreed on the continued need to combat climate change and protect the environment as well as to support the full implementation of the Paris Agreement and the Sustainable Development Goals SDGs Agenda.

The EU remains fully committed to assist Mongolia in sustainably diversifying its economic and foreign trade structures, as well as to cooperate on improving the Mongolian business environment and maximise the efficiency of Mongolian trade policy tools. Mongolia and the EU are committed to finalise their negotiations of an agreement on the protection of geographical indications, started in 2022.

The EU and Mongolia are examining the possibility of enhancing cooperation on security including peacekeeping.

The EU and Mongolia also discussed regional and global challenges. The EU and Mongolia expressed concern over the suffering of the civilian population and the bombing of civilian infrastructures, and emphasised the need for a comprehensive, just and lasting peace in Ukraine in line with the principles of the Charter of the United Nations. The EU recalled its position clearly expressed in the UNGA resolutions ES-11/1, ES-11/2, ES-11/3, ES-11/4, ES-11/5 and ES-11/6, underscoring the grave violation of the UN Charter and international law. The EU and Mongolia reaffirmed their commitment to the Charter of the United Nations and international law, including the need to respect the sovereignty, political independence and territorial integrity of all nations. It is essential to uphold international law and the multilateral system that safeguards peace and security.

Mongolia and the EU will continue working together to protect and promote human rights. The EU and Mongolia held their annual Human Rights Dialogue on 18 July 2023, which discussed most recent human rights related developments in the EU and Mongolia, the cooperation with UN Human Rights monitoring bodies, their respective approaches on Business and Human Rights, judiciary reforms in Mongolia and the ongoing reform of the EU’s GSP+ Scheme.

Mongolia and the EU held a meeting of the Working Group on Development Cooperation (19 July 2023), in which both parties welcomed the significant progress achieved since last year in the implementation of the Multiannual Indicative Programme for 2021-2027 and of Global Gateway, and also looked ahead towards future challenges and opportunities.

Mongolia and the EU agreed to strengthen their cooperation on green transition, connectivity and digitalisation with the support of the EU’s Global Gateway and Team Europe Initiatives with EU Member States and European Development Banks, creating synergies with Mongolia’s mid-term and long-term development agenda.

Mongolia and the EU agreed to hold their next Joint Committee meeting in 2024 in Ulaanbaatar.

The Joint Committee was co-chaired by Mr. Gunnar Wiegand, Managing Director for Asia and the Pacific at the European External Action Service (EEAS) and Mr Amarsaikhan Sainbuyan, Deputy Prime Minister of Mongolia.

During its regular session on July 26, 2023, the Cabinet made the following decisions:

Funds will be released from the Government's reserve fund for the reconstruction of bridge structures damaged by floods.

Minister of Finance B. Javkhlan approved the release of funds from the Government's reserve fund based on the request submitted by the Special Commission of Bayan-Ulgiy and Selenge aimags to the State Special Commission for immediate reconstruction and elimination of damages caused by dangerous weather phenomena and floods.

On June 10-12 in Bayan-Ulgiy aimag, due to excessive heat, the snow in mountainous areas melted a lot, and the water level of rivers such as Khovd, Sagsai, Bulgan, Buyant, Turgan, Chikhertei, Gantzmod, Tsagaan Gol, Sogoog, and Kharbutny exceedingly increased and reached a dangerous flood level. As a result, 7 wooden bridges and 1 reinforced concrete bridge were affected by floods and destroyed. Therefore, funds will be allocated from the Government Reserve Fund for the restoration of the bridges. Also, the budget for the reconstruction of a 150-meter long bridge over the Kharaa river in Mandal soum of Selenge aimag was resolved.

Due to the continuous rain in the capital, the dam of the Selbe River has burst in some places, and urgent restoration work is ongoing. At today's meeting of the Government, the Special State Commission was tasked to provide weather information to the public at all times to prevent any risk.

Increase access to schools and kindergartens

A working group to ensure the implementation of the Government's 2022 "Measures to improve access to kindergartens in the capital" and 2023 "Measures to be taken to reduce the burden and increase access to general education schools" has been established by the order of the Minister of Education and Science. The working group will study and solve the problem of providing a healthy and safe environment for more than 33 thousand children from 47 schools to avoid studying in 3 shifts in the capital, and enrolling 26.8 thousand children from 27 districts with a high workload to kindergarten.

Minister of Finance B. Javkhlan, Minister of Construction and Urban Development Ts. Davaasuren and Minister of Education and Science L. Enkh-Amgalan were assigned to develop and approve the relevant regulations in accordance with the Law on Construction, and to develop and discuss the Government's resolution to intensify investment work.

The permit will become digital and the law amended

Deputy Prime Minister and the Minister of Economy and Development Ch. Khurelbaatar presented an overview of the process of transitioning the Special Permit Fund into digital form and intensifying the work of connecting it to the integrated system of public services ordered by Government Resolution No. 233 of 2023 to the Cabinet meeting.

Members of the Government and relevant authorities are requested to take measures to improve the systems, to make changes to the relevant laws, laws, regulations, and rules in the context of intensifying the digitization of 85 permits out of the 249 special permits that have not been transferred to the electronic system under Article 8, Section 8.1 of the Law on Permits.

Brief news

- The Draft Law on the Ratification of the "International Convention on the Implementation of Measures Related to Tax Treaties for the Prevention of Tax Base Reduction and Profit Shifting" will be discussed and submitted to the State Great Khural.

- Discussed and supported the draft agreement between the Government of Mongolia and the Government of the Republic of Bulgaria on international road transport of goods and passengers, and decided to issue a decree of the Prime Minister on granting the right to sign the agreement.

- Minister of Health S. Chinzorig was assigned to present the current state of the quality and price of drugs and medical equipment in Mongolia and the measures to be taken in the future. In this regard, Chief Cabinet Secretary D. Amarbayasgalan and Minister of Health S. Chinzorig have been instructed to discuss the procedure for purchasing from foreign manufacturers or international organizations directly and through the organization of this relationship at the Cabinet meeting.

Rio Tinto (ASX, LON: RIO) disappointed investors and analysts alike on Wednesday after revealing it won’t be able to achieve a targeted 15% carbon emissions reduction by 2025, unless it uses carbon offsets.

The world’s second largest miner had originally committed to cut its Scope 1 and Scope 2 emissions, those created directly though its operations and indirectly through energy consumption, by 2030. It later decided to move the deadline forward to 2025 under shareholder pressure.

In a half-year update, Rio said would not be able to meet its self-imposed emissions goal without using carbon offsets. The company attributed the setback to underlying emissions growth tied to “evolving production plans” and other factors, including engineering and construction timelines.

Peers including BHP (ASX, LON: BHP) and Fortescue Metals Group (ASX: FMG) remain so far on track to meet their goals — at least 30% reduction of Scope 1 and 2 emissions by 2030 for BHP and net zero emissions by that year for Fortescue.

Chief executive Jakob Stausholm opened up earlier this year about the targets set by Rio Tinto’s previous executives, saying he “regretted” them. He added at the time that reaching the 2025 and 2030 deadline would require some “hard choices”.

The company’s emissions come mainly from the processing and refining of metals, such as iron ore and aluminum, as it requires very high temperatures and is often powered by coal. Mining only accounts for 20% of Rio’s total emissions.

“The problem is that in the short term, you add cost to a business where you are not really making money,” Stausholm said in an earnings call on Wednesday, referring to a $800 million impairment charge on its Gladstone aluminum refineries in Australia.

Capital will be required to decarbonize the facilities, which are also facing increasing payments for their carbon emissions under Australia’s new carbon credit scheme, he added.

The writedown combined with a period of softer prices for its iron ore shipments impacted Rio Tinto’s numbers for the six months to June 30.

First-half net profit after tax dropped by 43% to $5.1 billion in the period from $8.9 billion in 2022.

Rio still announced a $1.77 per share half-year dividend, which was also lower than market estimations but that is the third-highest interim dividend in the company’s history.

From July 9–11, Kyrgyzstan’s president Sadyr Japarov arrived on an official visit to Mongolia. During talks, the parties discussed deepening relations and cooperation, strengthening mutual political trust and the legal framework of relations, as well as regional and international issues of mutual interest. The main outcome was the signing of the Joint Declaration of Establishing Friendship and Cooperation as well as 10 other cooperation agreements in the trade, environment, security, and cultural spheres. The visit was capped off with the inauguration of the Kyrgyz Embassy in Mongolia on July 11.

There have been several examples of successful social and economic cooperation between the two sides. The outcomes of Japarov’s visit outcomes were similar to the outcomes of numerous previous visits by Kyrgyz and Mongolian leaders that may have fallen short of their stated goals in the economic sphere. However, his visit coincided with growing trade and an organic, bottom-up, people-to-people interaction, giving this effort a higher chance of bringing the two countries closer together.

Long common history and shared culture

Kyrgyzstan and Mongolia have a shared history and culture. Their interaction counts thousands of years. The ancestors of the current day Kyrgyz people originally inhabited the Yenisey River valley in central Siberia as early as 201 BCE and later the Minusinsk Hollow in southern Siberia in the 12th century CE.

Living in these areas meant neighboring and interacting with the Mongol people. The modern-day manifestations of this centuries-old interaction and shared history and culture are the extensive use of yurts and the central role of the horse in Kyrgyz and Mongolian culture, common among nomadic people. Another proof of the past geographic proximity and interaction between them is the lake called Khyargas Nuur (Kyrgyz lake), located in western Mongolia. The country is home to 2,000–3,000 ethnic Kyrgyz people who live in the western province of Bayan Olgii. One of them, Bulany Beisen, serves as a member of Mongolian parliament.

The modern history of cooperation between the two countries dates back to the Soviet Union, when Kyrgyzstan was a part of it and Mongolia was a satellite state. In 1986, the General Secretary of the Central Committee of the Mongolian People's Revolutionary Party, J. Batmunkh, arrived on an official visit to the Kyrgyz Soviet Socialist Republic (SSR). The two sides signed an agreement establishing direct friendly ties. In the same year the two sides signed an agreement on the main areas of cooperation for 1987–1990, aimed at exchanging experiences in the development of mining, agriculture and animal husbandry.

Independent diplomatic relations

The history of cooperation between Mongolia and Kyrgyzstan can be described as slow and steady. In 1991, Kyrgyzstan became independent following the collapse of the Soviet Union and started its transition to democracy. In 1992, the People’s Republic of Mongolia ceased to exist and the country switched from the socialist regime to a democratic one under the name of Mongolia. That same year the two countries established diplomatic relations as sovereign states.

In 1993, Kyrgyzstan’s first president Askar Akayev arrived on an official visit to Mongolia, and the two countries signed several documents that formed the legal basis for relations between them. Among them were the Treaty of Friendly Relations and Cooperation between Mongolia and Kyrgyzstan as well as agreements on economic, cultural, scientific, and environmental cooperation. Akayev visited Mongolia again in 2002. The negotiations ended with similar statements on mutual interest in economic, agricultural, and cultural cooperation.

Despite the ambitious plans, the relations developed slowly and did not yield any major results. In 2012, Mongolia’s former president Elbegdorj Tsakhia visited Kyrgyzstan. The visit somewhat revived bilateral cooperation as the parties reaffirmed the importance of further developing cooperation between the two countries. It was followed up by the opening of the Ulaanbaatar–Bishkek–Istanbul flight that established a direct flight between the two countries for the first time.

In 2014, Mongolia opened a General Consulate in Kyrgyzstan’s capital Bishkek. In 2015, Elbegdorj Tsakhia visited Kyrgyzstan for the second time and stated that the two countries were interested in active trade and economic cooperation. In 2017, Kyrgyzstan’s Ambassador to China, Azamat Usenov, was appointed Ambassador to Mongolia concurrently. In 2019, Mongolia’s former president Khaltmaa Battulga visited Kyrgyzstan and inaugurated Mongolian Embassy in Bishkek.

Growing trade and people-to-people diplomacy

The meager trade turnover between Mongolia and Kyrgyzstan hint at the fact that the cooperation between them has carried a political tone. The high-level meetings and agreements have not yielded any impactful results in the economic sphere. However, there have been positive changes in the last several years.

The trade turnover between the two countries in 2017 was only USD 1.6 million. It has since grown and reached USD 2.756 million in 2022. In the first four months of 2023, the number stands at USD 3.456 million, which is 5.8 times higher than from the same period in 2022. Food items make up most of the trade. These numbers are still meager compared to even the tenth largest trading partner of each country. The trade turnover between Kyrgyzstan and its tenth largest partner, India, is almost USD 118 million. Kyrgyzstan does not appear in Mongolia’s top 10 export or import partners. As optimists might say, there is a lot of room for growth.

Japarov’s visit is expected to continue the positive trend of the last several years. His visit resulted in the agreement that Mongolia will supply meat, meat products and leather to Kyrgyzstan and import fruits and vegetables from Kyrgyzstan. Similar outcomes were reported after Kyrgyzstan’s foreign minister visited Mongolia earlier in May. In this regard, the parties agreed to intensify cooperation between veterinary and quarantine institutions. Exchange of experiences in the mining industry and tourism are two other opportunities that make the most sense, given the countries specificities and strenghts.

Perhaps the more effective driver of interaction between the two countries is the budding car trade between South Korea and Kyrgyzstan, which is taking place with the help of Mongolia. Global Voices spoke to Tolotai, a businessman from Mongolia who facilitates this trade as the middle man. He says that the first time Kyrgyz businessmen came to Mongolia for cars was in 2019. They did so after realizing that such a route exists, and it is cheaper and faster to import cars to Kyrgyzstan from South Korea via Mongolia than from other parts of the world via Georgia and Armenia.

The COVID-19 pandemic put these plans on hold until 2022, when Mongolia finally opened its borders. That is when the car trade finally took off, according to Tolotai, who is one of many local businessmen involved in the trade. Between 100 and 200 cars leave for Kyrgyzstan every month. Some of them are sent off further to Russia, after being registered and receiving number plates in Kyrgyzstan. Russia and Kyrgyzstan are both members of the Eurasian Economic Union, which allows registering a vehicle in one member and driving it freely in all others. The car trade is made possible by Mongolian Kazakhs like Tolotai. Their linguistic and cultural similarity allows them to freely communicate with Kyrgyzstani businessmen.

The outcomes of the past official visits and talks show that the two countries remain friendly toward each other and ready to explore avenues for cooperation. The mutual establishment of embassies promises to speed up bilateral cooperation and take it to the next level. The high-level political engagement is supplemented with people-to-people trade and interaction. Mongolia and Kyrgyzstan’s slow and steady approach to cooperation may soon turn into swift and dynamic.