Hong Kong (CNN) As US President Joe Biden and top American officials traveled the world this summer, promoting a pledge of hundreds of billions of dollars for poorer countries, a largely unspoken motivation loomed in the background: competition with China.

For nearly a decade, Beijing's sprawling overseas development initiative, known as the Belt and Road, has poured billions of dollars into infrastructure projects each year -- paving highways from Papua New Guinea to Kenya, constructing ports from Sri Lanka to West Africa, and providing power and telecoms infrastructure for people from Latin America to Southeast Asia.

Washington now appears keen to bolster its own role in global infrastructure development as it intensifies its competition with China across the globe.

In June, Biden and leaders from the Group of Seven advanced economies promised to unleash $600 billion in investment -- $200 billion of that from the US alone -- by 2027 to "deliver game-changing projects to close the infrastructure gap" between countries.

This month, US Deputy Secretary of State Wendy Sherman visited the South Pacific, promoting a new partnership to bolster support for island nations, while US Secretary of State Antony Blinken announced a plan aimed at Africa.

"We've seen the consequences when international infrastructure deals are corrupt and coercive, when they're poorly built or environmentally destructive, when they import or abuse workers, or burden countries with crushing debts," Blinken said during a visit to Pretoria, where he revealed the White House's new "Sub-Saharan Africa Strategy."

"That's why it's so important for countries to have choices, to be able to weigh them transparently, with the input of local communities without pressure or coercion," he said in an apparent reference to common criticisms of Chinese-funded projects.

The challenge from the United States comes at a precarious time for China's Belt and Road. Even as the initiative has had an impact on a number of countries, funding shortfalls and political pushback have stalled certain projects, and there is public concern in some countries over issues like excess debt and China's influence. Accusations that Belt and Road is a broad "debt trap" designed to take control of local infrastructure, while largely dismissed by economists, have sullied the initiative's reputation.

Economic challenges at home and a changing financial environment globally also have the potential to impact how China's lenders and policymakers deploy funds, analysts say.

All this may create an opportunity for Washington to step forward and work with willing partners in need of financing. But major questions hang over the extent to which the US can deliver, both in terms of mobilizing billions and driving infrastructure -- areas in which China has long excelled.

Boom or bust?

Since its official launch in 2013, early in the first term of Chinese leader Xi Jinping, funds under the initiative have powered the construction of bridges, ports, highways, energy and telecoms projects across Asia, Latin America, Africa and parts of Europe.

To do this, China has relied on lending, with capital often coming not only from its development banks but state-run commercial lenders -- a stark difference to the American model that's been largely based on official aid.

On average, during the first five years of the initiative from 2013 to 2017, China spent about $85 billion financing overseas development projects per year, more than twice as much as any other major economy, AidData, a research lab at William & Mary in the US, which tracks this spending from Chinese government institutions and state-owned entities, said in a 2021 report.

And while funding has been welcomed by countries around the world, it has also come with problems.

"We find that 35% of (Belt and Road) projects are suffering from some sort of implementation challenge," said research scientist Ammar A. Malik, who heads AidData's Chinese Development Finance Program. He said those issues include environmental incidents, corruption scandals and labor violations, and the 35% figure refers specifically to projects implemented solely by a Chinese entity.

AidData has also reported on what it terms "hidden debts," referring to cases where the recipients of Chinese loans are entities like private or project companies, not governments themselves, but the terms of the loan require the host government to guarantee it. This can ultimately pass liability to them for repayment if the borrowers fall short, the researchers say.

China has pushed back on assertions of risky lending or environmental issues in its projects, pointing to its "green" initiatives and saying "such allegations do not reflect the whole picture."

Another question concerns the direction of the initiative, especially as China's own economy flags amid a mortgage crisis and Covid-19 lockdowns, while many developing countries are struggling with rising debt and inflation -- making lending a potentially riskier proposition.

Beijing has said it remains dedicated to the initiative, with its top diplomat Yang Jiechi at a trade forum on August 14 calling for Belt and Road to "promote the early recovery and growth of the global economy."

But while tracking investments across a wide range of players, and without a central, public Belt and Road data source, is difficult work, there are signs that China's efforts, especially big-ticket projects, have been slowing in recent years and since the pandemic.

For example, Chinese loans to Africa dropped 77% from $8.2 billion to $1.9 billion from 2019 to 2020, according to data from the Boston University Global Development Policy Center.

"Potential reasons for this decrease include the Covid-19 pandemic's deterioration of economic conditions in host countries and a lack of host country demand due to fiscal constraints and debt issues. Limited travel and suspension of several (Belt and Road) projects may have also contributed to preventing financial deal closing," said data analyst Oyintarelado Moses of the center's Global China Initiative.

"Before the pandemic, Chinese policy bank finance was already on the decline. The pandemic appears to have accelerated this trend," she said, adding Chinese institutions would now "take stock" of their strategies.

More time may be needed to observe whether Belt and Road infrastructure financing has peaked, and to assess the performance of the initiative overall, others say.

"The (initiative) is not even a decade old yet. Labeling it a failure because of delayed or distressed projects would be premature and simplistic, as would deeming it a success for Chinese global influence," said Austin Strange, an assistant professor of international relations at the University of Hong Kong.

Build Back Better?

The US is already the world's top donor of aid for developing countries. But whether it can mobilize its private sector and a recently revamped development finance arm, known as the US International Development Finance Corporation, to rival China as an infrastructure financier is another question.

The G7 initiative, originally announced in 2021 under the name Build Back Better World, meanwhile, has gotten off to a slow start, analysts say. The leaders only formally launched the initiative -- now called the Partnership for Global Infrastructure and Investment -- in Germany this summer.

In addition to the US pledge of $200 billion from grants, federal financing, and private sector investments, the White House promised the project would "demonstrate how millions of dollars can mobilize tens or hundreds of millions in further investments and tens or hundreds of millions can mobilize billions."

But unlike Beijing's model, where state-run entities play a key role, the US has no such ability to determine the size and scope of investments made by its private sector, analysts say.

The US also doesn't have the same kind of domestic dynamics, such as excess capacity in the industrial sector, which made the Belt and Road an ideal outlet for the Chinese economy and enabled it to launch projects quickly.

"This is not the first time that expectation has been built, but it's going to be quite challenging to get private companies to finance (projects) because at the end of the day, they're accountable to their shareholders and they want projects that are bankable," said AidData's Malik.

But while US private companies will be looking to return a profit, the plan does have the potential to open up opportunity for the US and partners in developing countries, particularly in certain sectors, analysts say.

One reason is that US appears poised not to compete with China on the kinds of signature big-ticket items like bridges and railroads its known for, or to seek to push countries to choose it or China -- a choice few would likely be willing to make.

Instead, it could use its own model of public-private finance and focus on areas where it may have competitive advantages, analysts say, with Biden laying out energy security and climate resilience, information and communications technology projects, as well as infrastructure that promotes gender equality and strengthens health care systems, as areas of focus.

However, the US and its partners will need to do more than in the past to become "strong alternative sources of investment" chosen by partner governments over China, according to Moses at Boston University, who added US strengths in regulatory standards, transparency and environmental or social safeguards could appeal to some partners.

The US may also need to face perceptions that it retreated from Africa after the end of the Cold War, only to return when there is another great power rivalry at play, according to Christopher Isike, director of the African Center for the Study of the United States at South Africa's University of Pretoria.

"When these initiatives come, like (the US' new "Sub-Saharan Africa Strategy") people are skeptical," he said.

Governments on the continent, however, would welcome more sources of funding to meet shortfalls, and there is a perception that the US is more transparent and it has an advantage when it comes to soft power, according to Isike.

As that great power competition returns to Africa, the question, he said, should not be whether or how countries would choose between the US or China, but if African governments "would be ready to leverage the benefits of having this kind of contest."

Assistant Secretary of State for East Asian and Pacific Affairs of the U.S. State Department Daniel J. Kritenbrink will pay a visit to Ulaanbaatar, Mongolia from August 23-25.

During the visit, the Assistant Secretary will participate in Mongolia-U.S. annual bilateral consultation meeting. At the meeting, the parties planned to exchange detailed opinions on issues such as strengthening cooperation and strategic partnership based on common interests and values, including strengthening Mongolia's democratic institutions and diversifying the economy.

Xanadu Mines has received Australian Foreign Investment Review Board approval for Chinese mining giant Zijin to acquire shares in the company to develop its Kharmagtai copper-gold project in Mongolia.

The board’s no-objection notification is the first of three approvals required for Zijin to continue its three-phase investment in Xanadu that was announced in April.

The deal still requires approval from the Chinese Government and Xanadu shareholders in order to be formalised.

However, Xanadu is confident both approvals are on track in addition to funding from the remaining two investment phases for the upcoming December quarter.

The first phase of the deal that has been completed involved Zijin investing $5.6m for a total of 139 million fully paid ordinary shares, giving it a 9.9 per cent minority stake in Xanadu.

At phase two Zijin will invest another $5.7 million to increase its stake to 19.99 per cent.

Through the third phase Zijin will create a 50-50 joint venture with Khuiten Metals, currently wholly owned by Xanadu.

Khuiten owns a 76.5 per cent stake in the Kharmagtai mine.

Zijin plans to acquire the Xanadu shares through its fully owned subsidiary Jinping Mining.

The investment includes US$20 million to fully fund a prefeasibility study and an additional US$15 million to fund continued exploration at Kharmagtai.

After the three phases of investment are completed, Xanadu will retain control and remain the operator of the project with any change of control requiring a post-deal offer from Zijin subject to shareholder approval.

FIRB approval is an important step in finalising our agreement with Zijin, confirming the Australian Government’s approval of the transaction. This brings us one step closer to the funding we need to develop Kharmagtai to a decision to construct and continue to realise its potential.

Xanadu Mines Executive Chairman and Managing Director, Colin Moorhead

Xanadu’s Kharmagtai project has a mineral resource estimate identified at a massive 1.1b tonnes for three million tonnes of contained copper and eight million ounces of gold.

Based on the company’s scoping study predictions for the first five years of production, Kharmagtai shows a diminutive strip ratio of just 0.9, an averaged milled copper grade of 0.29 per cent and the company expects to produce an average of 37,000 tonnes of copper per year.

Earlier this month Xanadu completed metallurgical recoveries of up to 91 per cent gold and 46 per cent copper from preliminary glycine and cyanide leach testing at the project.

The tests were performed on partially oxidised material from surface to 30m depth and returned head grades between 0.52 and 2.25 grams per tonne gold and from 0.12 up to 0.67 per cent copper.

Xanadu says the results show a potential treatment path for about 90 million tonnes of oxidised material treated as waste in the company’s scoping study due to low flotation recovery.

The leach tests aimed to determine metallurgical recovery of gold and copper and gauge the potential of additional glycine to enhance recovery and reduce cyanide consumption.

Xanadu says the results are the first step in evaluating a material uplift opportunity identified in the scoping study to generate additional cash flow by leaching partially oxidised, near-surface material.

The company also fully owns its Red Mountain project in southern Mongolia, where early exploration has defined broad zones of strong quartz stockwork veining and associated high-grade gold mineralisation of about 0.5 to more than 5 grams per tonne gold and 0.3 to 1.5 per cent copper.

Xanadu says it is positioning Kharmagtai as the “Cadia Hill of Mongolia”, a reference to the giant Newcrest Mining-owned copper-gold mine in NSW. Management says Kharmagtai stacks up well against Cadia Hill on strip ratio, scale and copper grade.

Moorhead is no stranger to Newcrest’s operations, having previously risen through the ranks to Executive Manager and been responsible for global exploration and resource development with the company from 2008 to 2015.

Xanadu Mines’ (ASX:XAM) shares have risen 6.25% in morning trade to 3.4c on the news Chinese mining giant Zijin has been approved to invest in the company as it progresses the Kharmagati copper-gold play.

Kharmagati, located in Mongolia, was the subject of much success earlier this month, when Xanadu used a novel downstream separation method to recover 91% of gold in early stage ore tests using technology patented in Western Australia.

Today’s approval from Canberra (to be specific, the FIRB) for Zijin to further invest in Xanadu Mines, picking up a 19.99% shareholding.

Zijin to pick up another 10% stake

In April, the company saw Zijin pick up a 9.98% share in Xanadu through the acquisition of 139m ordinary fully paid shares at 4c for $5.56m.

While a gentle relationship building process remains underway between the relatively new Albanese ALP government, and that of Xi Jinping’s, industrial collaboration between the Australian and Chinese private sectors remains robust as ever through 2022.

Zijin is pouring millions into the copper-gold project, which boasts a strong ESG focus. That focus was what prompted the company to use a novel downstream refining technique that requires less liquid cyanide than usually utilised in gold operations.

Xanadu notes negotiations surrounding the pending acquisition of a 10% stake remain ongoing.

Summary look at Kharmagati

Currently, mineralisation remains open in all directions on-site and ongoing drilling is underway to further define mineral resources.

A four year payback is expected for the mine with initial capital expenditure valued at US$690m for an open pit development and associated processing infrastructure.

The internal rate of return for Kharmagati is tipped at 20% after tax across a thirty year mine life.

Australians in Mongolia

It’s also worth noting that a growing number of Australian-listed companies are operating in Mongolia in recent years.

Xanadu Mines is joined in the jurisdiction (while unrelated) by a CSG energy partnership spearheaded by TMK Energy (ASX:TMK) along with Talon Energy (ASX:TPD).

Jade Gas (ASX:JGH) and Elixir Energy (ASX:EXR) both develop similar projects, while Rio Tinto (ASX:RIO) and private mining contractor Thiess also operate in the region.

The Australian website for the Mongolian embassy notes over 50 Australian companies operate in Mongolia across all sectors.

The building of positive sentiment in Xanadu following its partnership with Zijin is evident in the company's three month share price performance chart

The building of positive sentiment in Xanadu following its partnership with Zijin is evident in the company's three month share price performance chart

Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Xanadu Mines was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at jon@marketindex.com.au.

The Khushigt Valley – New Settlement Zone, which is set to be home to 150,000 people by 2040 and become a thriving hub for business, tourism and culture, is part of an effort by the Mongolian Government to develop ‘satellite cities’ around the country’s capital Ulaanbaatar.

The development of the Khushigt Valley is a key part of the Mongolian Government’s New Recovery Policy and Vision – 2050 ambition, which aim to transform Mongolia into a leading regional power by the middle of the century through supporting economic development, improving the education system and promoting gender equality.

The Mongolian Government has already committed 30 billion MNT in this year’s state budget to the project, with this figure set to rise to over 200 billion MNT next year. Construction is initially focusing on creating new water wells and a 35kw power line. This is the first new city to be built in Mongolia since 1980.

China's Xi Jinping and Russia's Vladimir Putin both plan to attend the Group of 20 summit in Bali in November, Indonesian president Joko Widodo says.

"Xi Jinping will come. President Putin has also told me he will come," Mr Widodo, also known as Jokowi, told Bloomberg News in an interview.

This is the first confirmation that both leaders will attend the summit.

It will be the first global summit since Russia's invasion of Ukraine and the heightened tensions over Taiwan.

It would also be the first time Mr Xi has left China since January 2020 when the country shut its borders at the start of the Covid pandemic. Since then, he only left the mainland to mark the 25th anniversary of Hong Kong's return to China on July 1 this year.

The November summit will be much-awaited given that US President Joe Biden is also expected to attend - it's unclear if he will meet Mr Putin.

But reports have hinted at the possibility of a face-to-face meeting between Mr Biden and Mr Xi soon - ahead of the summit or on its sidelines.

Relations between Washington and Beijing have soured over human rights, trade and most recently US politician Nancy Pelosi's visit to Taiwan - the historic trip prompted China to conduct nearly a week of military drills around the self-ruled island, which it claims as part of its territory.

The US condemned the drills, which Taiwan described as a rehearsal for an invasion, as "irresponsible".

The summit is also happening in the wake of China and Russia declaring a "no limits" strategic partnership even as much of the world condemns Mr Putin's decision to invade Ukraine.

Washington earlier called for the G20 to remove Russia's membership and withdraw Mr Putin's invitation to the summit over the Ukraine war.

Indonesia, meanwhile, has positioned itself as a peacemaker between the countries.

"The rivalry of the big countries is indeed worrying," Jokowi told Bloomberg News in the interview. "What we want is for this region is to be stable, peaceful, so that we can build economic growth."

Earlier this week, the Indonesian leader said both Russia and Ukraine had accepted his country as a "bridge of peace".

In June, he was the first Asian leader to travel to Kyiv and Moscow to meet with Ukrainian president Volodymyr Zelensky and Mr Putin. During the meetings, he called for an end to the war and solutions to the global food crisis.

China purchased 7.42 million tons of Russian coal last month, according to data released by the General Administration of Customs on Saturday.

The figure marks the highest monthly level since comparable statistics were launched in 2017. It was up from 6.12 million tons China imported in June and 6.49 million tons in July 2021.

Western buyers opted to avoid shipments from Russia ahead of an EU ban on the country’s coal, which came into effect on August 11. The embargo, aimed at reducing Moscow's energy revenue, is part of sanctions over Russia’s military offensive in Ukraine.

The Western restrictions have created opportunities for Asian powers, particularly China and India, to boost purchases of Russian coal at discounted prices. Russian thermal coal with a heating value of 5,500 kilocalories reportedly traded at about $150 per ton in late July, while coal of the same quality at Australia's Newcastle port was priced at over $210 per ton.

READ MORE: India ramps up purchases of Russian oil – Reuters

China is Russia’s largest coal buyer, taking in more than 50 million tons of the commodity worth $7.4 billion last year via rail and sea, from Russia’s Far East. Russia accounted for roughly 15% of China’s total coal imports during that period, and was its second-largest supplier behind Indonesia.

China’s shipments of Indonesian coal, mostly cheaper and of lower quality, with a heating value below 3,800 kcal, amounted to 11.7 million tons in July, up 22% from June but down 40% from a year earlier. Meanwhile, the country’s customs data showed zero coal shipments from Australia last month.

Officials of the Ministry of Digital Development and Communications held an online meeting on August 16, 2022 with Ms. Gwynne Shotwell, President and COO of SpaceX and Elon Musk's team.

During the meeting, in addition to the Starlink project, Elon Musk's renewable energy projects, SolarCity and Hyperloop, were discussed.

In May 2022, the Ministry approved the ‘Guidelines for the use of low-orbit satellite networks’ and discussed how this policy document will be aligned with the operational strategy of Starlink.

Furthermore, both sides discussed the possibility of cooperation.

SpaceX announced that the renewable energy SolarCity and Hyperloop projects to reduce urban traffic jam can be implemented in Mongolia.

The Ministry of Digital Development and Communications expressed its interest in the above projects, connect SpaceX with the relevant officials, and focus on implementing them in Mongolia.

Source: Ministry of Digital Development and Communications

The Mongolia-Japan business forum is being organized on the occasion of the 50th anniversary of the establishment of diplomatic relations between Mongolia and Japan, the 25th anniversary of the establishment of JICA's representative office in Mongolia, and the 20th anniversary of the establishment of the Mongolia-Japan Human Resource Development Center.

The forum is being held with aims to create an opportunity to create mutually beneficial and long-term business relations and good partnerships when the pandemic situation subsides. On this occasion, representatives of Japanese companies running business in Mongolia are making presentations and exchanging information on the development of business and economic relations between the two countries, such as the environment, finance, information technology, and communication, and discussing future goals. Specifically, the discussions are being held on the introduction of Japanese technology to solve Mongolia's climate change and environmental problems, expectations from the Japanese market, and the possibility of investing in Mongolia's financial market.

In his opening remarks, Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia Kobayashi Hiroyuki said, "Mongolia and Japan should review the history of the past 50 years, learn from the lessons, and reflect them in the development of future cooperation. In terms of business relations, an economic partnership agreement has been signed between the two countries, and Japanese companies are running business in Mongolia and their investments are gradually increasing. The pandemic situation had a negative impact on the economy. By making efforts to overcome this crisis, the countries of the world aim to move to a new phase of restoring normal social and economic life alongside this virus”.

Minister of Foreign Affairs B.Battsetseg underscored that Japan is the first third partner of Mongolia to have a strategic partnership relationship and to sign an economic partnership agreement. The Minister also called for the expansion of the economic partnership established between the two countries and further development of communication, information technology, and electronic areas.

Mongolian business representatives will officially participate in the international exhibition ‘Osaka-Kansai EXPO’ in Japan in 2025. In 1970, Mongolia first participated in the ‘Expo 70’ exhibition held in Osaka, Japan. Currently, more than 670 enterprises with Japanese investments are operating in Mongolia.

More than 300 representatives from Mongolia and 100 representatives from Japan are participating in the forum, which is jointly organized by the Ministry of Foreign Affairs of Japan, JICA's representative office in Mongolia, and the Mongolia-Japan Human Resources Development Center.