Ariel Cohen has a new piece in the Washington Times, which has some very interesting material on Russia's growing diplomatic overtures to Mongolia to seal up uranium supplies, as well as some info on a letter sent by President Barack Obama to the president of Azeribaijan (let's see if Ilham Aliyev treats him a bit better than Dick Cheney).
As the rain falls on St. Petersburg's glitzy economic forum and the Obama administration plans its summit meeting with Mr. Putin and Mr. Medvedev in July to negotiate Moscow's accession to the World Trade Organization, Russia is consolidating its geostrategic advantage from the Gobi desert to the Black Sea. The U.S. and Europe had better take notice. While the talk of high-tech diversification appeals to Western businessmen, the real show is happening thousands of miles away from the capital Peter the Great built on these grim Baltic shores.
Mr. Cohen's article is inaccurate on at least one point:
The mining licenses related to the Oyu Tolgoi and Tavan Tolgoi sites simply are not being transferred. This story is said to be the result of mistaken impressions among the Russian media. This is not to say they won't be transferred in the future, but within Mongolia right now no one, from the government down to the miners, thinks those licenses are going anywhere.
Also, Cohen describes the licenses as "contracts," which is somewhat misleading. He may be intending to refer to the Stability Agreements for the Oyu and Tavan Tolgoi sites, which function sort of like bilateral treaties between the Mongolian Government and the companies operating those sites. Mongolia has a similar contract with Korea Telecom which fixed the tax rate for the latter, making it immune to subsequent changes in taxation law. However, the Oyu and Tavan Tolgoi Stability Agreements have been in parliamentary limbo for years now, have not been signed, primarily address taxation rather than ownership, and in their perpetually unratified state promise absolutely nothing. The mining licenses, on the other hand, have been pretty solidly owned by "Western" interests for even longer and are very binding.
It is probable that Russia would like to see its companies developing Mongolia's mineral deposits. I mean, what country wouldn't? However, the largest discovered ones (with the exception of Erdenet which has been Russian-operated for decades and a large silver mine whose name I can't recall at this moment) are firmly out of the reach of Russian firms for the time being.
Mr. Cohen is most accurate talking about the railroads. UB Rail isn't actually owned by Russian Railroads, as he implies, but 50% of the former's shares are administered by the Russian Federal Agency for Rail Transport. Those shares will be transferred to Russian Railroads later this year, but they haven't been moved yet, at least not that I can tell. The officials responsible for administering the Russian half of UB Rail also did in fact order the rejection of MCC funds, and publicly gave very flimsy reasons for doing so. It is also my understanding that this rejection has already happened. Mr. Cohen's wording suggests he thinks this is an imminent event, but I'm fairly certain the ship has already sailed.
At any rate, Mr. Cohen is wrong about the mining licenses, but he is almost certainly right about the railroads being the lynchpin in a Russian campaign of seeking further influence in the region.
Apologies for the length of my comment. Mongolia is a complicated place, and I felt I had to give some context for some of Mr. Cohen's generalizations. Also the Times website won't let me log in for whatever reason, so I had to do it here.
Thanks kindly for your clarifications on Mongolia and mining - it is very helpful. As a democracy, Mongolia is an anomaly in the region, and it will be interesting to see how Russia's political preferences for the country turn out.