A fifth of Mongolian land has been earmarked for mining. Investors are so happy about this they have given a new moniker to the world’s second-biggest landlocked country: “Minegolia”. Mining’s share of Mongolia’s economy has doubled in a decade. Copper, gold, uranium, silver and coal mines account for 20-30% of national GDP and 89% of annual exports. Oyu Tolgoi, already one of the largest mines in the world, is expected to expand during the next few years despite weak commodities prices, and will have an increasing impact on the country’s economy and its ecology.
The International Monetary Fund predicts that by 2021, Oyu Tolgoi will account for a third of Mongolia’s GDP and that mining’s share of the economy will account for over half. But the Gobi Desert is more than a vast store of mineral deposits and is also home to many endangered plants and animals. “The world is in danger of losing these valuable species into extinction forever,” said Choikhang Janchivlamdan, a director from the environmental non-profit Green Initiative, when asked about the impact of continued mining on these desert habitats. Mining has left water reserves overexploited, he says. Even in rocky outcrops - previous havens for parched animals - water has disappeared, he adds. One of these endangered animals is the Asiatic Wild Ass and Green Initiative has observed the species scraping 60-centimetre deep holes into the cracked banks of dried up rivers to quench their thirst. Other endangered animals native to the Gobi include the black-tailed gazelle, argali sheep, ibex, Mongolian gazelle, corsac fox, cinereous vulture, steppe eagle and grey wolf.While mining companies claim to use separate, deep-underground saline water called ‘fossil water’, in reality many do not. For this, deep drilling and large investment is required, says Mongolia’s United Nation’s Development Programme (UNDP) deputy representative, Thomas Eriksson. Instead of fossil water, mines use precious groundwater, polluting and draining water reserves that are shared with animals and people.According to a World Bank study in 2010, the Southern Gobi region only has sufficient groundwater for the next decade or so, while herders in the region have testified to the impact of mining on aquifers. Despite the droughts and other ecological threats posed by mining, many countries are still eager to follow the UK, Canada, Russia and China, and invest in Mongolia’s mining boom.
In 2011,Germany signed a coal agreement with Mongolia, Last year, a free trade agreement was signed with Japan, and a second trade agreement is in the works with South Korea.Mongolia is heavily dependent on foreign investment, which it makes it difficult to reject proposals from foreign mining interests - especially from neighbouring China. Some 89% of Mongolia’s exports, which are mostly minerals, rely on Chinese buyers. “There are few countries in the world where Chinese trade, foreign investment and global commodity prices have such an impact,” says Eriksson, as Mongolia “has not yet set aside sovereign wealth (for environmental protection or health)” Mongolia is suffering from China’s economic slowdown and has already reacted with emergency austerity measures.
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