As Mongolia cowers under the brutal thrall of its worst winter in decades, questions are being asked as to whether the country should end its reliance on nomadic herders and dig deeper into its mineral reserves instead.
Some 800 years ago, Mongolia’s nomadic herdsmen were surging across the steppe under the leadership of Genghis Khan and conquering China, Tibet and much of central Asia.
Today, most of their descendants are at the mercy of the hostile Mongolian weather or crammed in the capital, Ulan Bator, where they struggle to make a living even though the country sits on some of the world’s richest mineral reserves.
Mongolia has been extremely cautious about developing its huge but untapped reserves of coal, copper, gold and uranium, and it recently announced it would cancel an auction for the world’s biggest coking coal reserve at Tavan Tolgoi.
However, the government’s hand might be forced by a massive fiscal debt, coupled with a crippling humanitarian problem as nomadic herders, fleeing a freezing winter that is killing their herds, overwhelm the capital.
The ruling Mongolian People’s Revolutionary Party needs cash quickly to relieve the strain on Ulan Bator and provide jobs and an education for 1 million struggling nomads. The cash can only come from opening up its mining sector to foreign firms.
“You have to have revenues coming from somewhere and that is going to come from mining. If you do dodgy deals, then yes you will have a problem, but I don’t think Mongolia should be holding back,” said Arshad Sayed, country manager with the World Bank.
Foreign mining firms have been discouraged from investing in Mongolia since the government began to insist on majority local ownership for big projects and slapped a windfall tax on mining profits that will not expire until next year.
Most of Mongolia’s resources remain unexplored, particularly in the South Gobi region, but copper reserves from the Oyu Tolgoi deposit alone are second only to Chile. Its inferred uranium reserves are also estimated to be the world’s second largest, behind Australia.
Yet this underground wealth provides little solace for the millions of refugees who huddle from the cold in Ulan Bator’s makeshift shanty towns, stuffing rudimentary stoves with coal and wood or anything else that burns, and casting the city in a sulphurous fog.
The recent snowstorms, known locally as the zud, are said to be even worse than the winter 10 years ago, when scores of stranded nomads died along with 11 million heads of livestock.
“My sister still lives in the east as a herder and every day she wakes and finds more animals dead,” said Dambadarjaa Enebish, a 60-year-old refugee, one of thousands of nomads who fled to Ulan Bator during the harsh winter of 1999-2000.
With at least 2 million head of livestock already believed to have perished, conditions don’t come much tougher even by the standards of the harsh central Asian steppe. The Red Cross said it could be spring before the full extent of the damage is known.
“It is a very bad crisis,” Mongolian Prime Minister Sukhbaatariin Batbold said. “The cold we are experiencing now is a record low for the last 37 years and 90 percent of the country is covered in snow.”
Ulan Bator’s refugee problem began after the collapse of the Soviet Union, when herders facing new Russian export restrictions began to flee the harsh pastures and erect thick woollen tents known as ger on the hills that encircled the capital.