At a remote outpost in the Gobi Desert, hundreds of kilometers from any paved road, Keith Marshall is poring over satellite images, geological surveys and sheets of statistics, literally mapping out Mongolia’s economic future.
Working out of a wind-lashed military-style tent dubbed the “Weather Haven,” the British engineer is laying the groundwork for what he says will be one of the biggest copper mines in the world.
Oyu Tolgoi, or Turquoise Hill, will have the capacity to churn out a million tonnes of copper each year, as well as gold, a potentially big boost to this impoverished country’s economy, which still relies heavily on Soviet-era infrastructure and donor aid money.
Sandwiched between Russia and China, Mongolia has a population of just 2.7 million people spread over an area more than double the size of France. The average salary is just US$200 a month.
“Oyu Tolgoi is going to bring dividends to the Mongolian people for four or five generations to come,” said Marshall, managing director of Ivanhoe Mines Mongolia, the Canadian company that owns the exploration license for the site.
The copper concentrate will be shipped to China and eventually find its way into cellphones, laptops and cars around the world.
But Oyu Tolgoi has been the subject of much controversy and has yet to win government approval, with the issue stirring debate from nomad camps in the Gobi to the streets of Ulan Bator and the halls of parliament.
A final contract between the government and Ivanhoe has been held up by angry street protests, as citizens have demanded a greater percentage of the profits.
In a compromise, Ivanhoe agreed to give the government a 34 percent stake in the project, which Marshall estimates will require between US$6 billion and US$10 billion of investment to make fully operational.
The government has since indicated it wants a 51 percent share.
“No one in Mongolia has the experience to handle such a huge mine,” said Sainkhuugiin Ganbaatar, president of the Mongolian Trade Union and onetime leader of the street protests. “So we must not rush into a deal with a foreign mining company until we fully understand what is at stake.”
Ganbaatar, regarded as a non-partisan voice, is demanding a full appraisal of the mine from an independent body.
The mining company is growing increasingly restless, but investor confidence remains strong. Rio Tinto recently bought a 9.9 percent stake in Ivanhoe Mines Ltd.
In the meantime, 500 workers keep the project going. The mine is expected to employ 5,000 people, with thousands more coming to fill out of the supply chain expected to grow around the mine.
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