Guide
It tells the story of the dilemma faced by a copper mine in Mongolia, which was forced to build a smelting plant to contract foreign debt, which caused foreign investors to be discouraged. The need for policy adjustments in Mongolia has also been discussed, arousing speculation about its conservative mentality.
Copper ore cannot be sold
The copper mine in Mongolia is located in Mongolia and is actually still being excavated, mainly by Rio Tinto from Australia. The mine, with its staggering reserves, was once considered to be the world's largest copper mine, and is worthy of being Rio Tinto's first mineral mining project in Mongolia.
According to the original plan, Rio Tinto will complete all exploration work for the copper mine in 2022, and will also export some of its products to the international market in this year. However, what Rio Tinto did not expect was that the Mongolian authorities issued a new regulation mandating Rio Tinto to establish a copper smelter in Mongolia, not to sell ore directly, and there were more stringent requirements.
Mongolia has asked Australia to contract $2.4 billion in foreign debt, and Rio Tinto cannot decide whether it wants to contract, so it can only follow the authorities' rules. Rio Tinto has communicated with Australia authorities several times in response to this regulation, but has not received a clear answer, because Australia itself is facing an external debt problem, and where to make up this huge gap has not yet been finalized.
On the surface, Mongolia's policy is to make better use of its copper resources and promote local economic development. After all, the construction of factories and smelting can provide a large number of employment opportunities, and it is also conducive to cultivating the development and growth of related industries. But I don't know what kind of mentality, the Mongolia authorities seem to be more interested in letting foreign capital contract foreign debt for themselves.
It is not so much for Rio Tinto to build factories in Mongolia as for Australia to buy these copper mines, after all, the foreign debt of 2.4 billion US dollars is not a small amount, and if it cannot be repaid on time, I am afraid that Mongolia will fall into a very passive situation.
Adjust policies to attract foreign investment
Against this backdrop, neither Rio Tinto nor other potential investors are reluctant to come. Because no one knows what kind of regulations the Mongolia authorities will issue tomorrow, maybe they will see the project start, but they will be forced to contract foreign debts, and they don't know it here.
In the strict sense of the word, it can be said that Mongolia is undermining its potential opportunities for development. According to the latest data released by Rio Tinto, after it was forced to contract foreign debt, the Australia authorities and Mongolia authorities signed an agreement to ensure that the $2.4 billion external debt was properly resolved, but the corresponding effect is that Australia will no longer consider building a factory here and will directly use it to repay the foreign debt imposed here.
And even so, in 2022, the mine will only be able to produce about 130 thousand tons of copper products, but even this small capacity is not easy. Because of various restrictions and self-restraint, Mongolia has always been at the bottom of the copper mine production ranking.
If the policy is not adjusted in time to attract foreign investment into mining, it will not only lead to long-term idle waste of copper ore resources, but also fail to form an effective industrial chain and employment-driven capacity, and will inevitably be in a rather passive state in economic development. So why is there such an embarrassing situation in Mongolia?
In addition to the geographical location and land resources, it is mainly due to its over-conservative and exclusionary mentality. It is reported that we are not the only media who have obtained the news, and the behind-the-scenes truth obtained during the interview is also very worthy of our in-depth guessing.
Mongolia banned Rio Tinto from selling copper ore products to the eastern powers because it was afraid that its sworn enemies would use these products against it; Moreover, it is not even possible to use ships and airplanes produced by the big Eastern countries for the transportation of products, so they can only build their own production lines and use only the electricity they produce. So the only option for now is to rely on coal for power generation.
epilogue
The policy adjustment behind the copper mine problem in Mongolia has caused a lot of controversy, and whether it should continue to be conservative or adjust the policy to attract foreign investment is a question that needs to be deeply speculated. A conservative mindset may cause Mongolia to miss development opportunities, but it cannot ignore national security considerations. What do you think? Come and leave a comment to share your views!