When a US$100bn international mining firm grows its presence in a country, it’s worth sitting up and taking notice. Rio Tinto – operating on six continents extracting a dizzying array of minerals – has just announced increased operations in Mongolia. Already, one of the biggest investors in the country, it is gearing up to massively expand its exploration activities. But why?

Asia Pacific Investment Partners (APIP) identified five reasons one of the world’s largest miners is betting on Mongolia.

1. Mongolia has mineral wealth…
Some countries have oil. Others, financial services. "Mongolia has minerals aplenty." says APIP. "Estimates vary from US$1.2 to US$2.5 trillion, with a population of only three million. It can’t be divvied up, but if it could, this would equate to US$400,000 per man, woman and child. In the past, miners have piled in. Rio has invested billions into the country, and continues to work hard on its massive Oyu Tolgoi mine. Now, prospectors are pouring in, as the country has doubled its land available for exploration. Rio, has opened a new exploration office in Ulaanbaatar, and plans to staff it with eighty ambitious technicians and miners by the end of 2018."

2. … and it’s far from confined to one resource.

"Mongolia has coal, copper and gold. Its copper reserves are the thirteenth largest in the world, and when OT comes online, it will be the third largest mine of its kind. But it doesn’t end there. It has huge quantities of gold, and the industry is in its infancy. This not to mention coal, long unfashionable, but still the sustenance for China’s insatiable steel mills. With the eleventh largest uranium reserves in the world – necessary for the generation of nuclear power – it’s not only Rio who are likely to pile into this last great frontier." According to APIP

3. But even if it was just copper, global demand is anicipated to increase nine fold by 2027!

APIP state that "In a report earlier in 2017, the International Copper Association (ICA), predicted there would be a massive uptick in the world’s appetite for copper components, due to the electrification of vehicles and the development of new technologies. We all know that to live in a greener, cleaner world, we’re going to rely more and more on technologies with reduced omissions. Whether in batteries, solar panels, or shiny new Teslas, copper matters. Copper is king, and Mongolia its source."

4. FOMO

‘Fear of missing out,’ isn’t just for millennials. APIP told SCHWARTZWILLIAMS that "It’s for massive corporates too! The largest producer of copper in the world is Chile, and the largest company engaged in its  extraction is Codelco. In the summer, it announced its first foray outside of Latin America, seemingly recognising Mongolia’s promise. Not to say Rio is easily cajoled, but it does want to reinforce its predominance in a country where it has already invested US$7 billion. It cannot stand on the side-lines as more and more organisations establish themselves in Mongolia."

5. Better governance and a commitment to investment. 

APIP report that "It’s no secret that Rio Tinto’s love affair with Mongolia went through a period of intense marriage counselling. But it has long since been resolved, facilitating multi-billion-dollar investment into the country. The fact Rio is again beginning exploration activity is a vote of confidence, after years of plunging foreign direct investment, and an exodus of expatriates. Three letters sum up this change: I-M-F. The International Monetary Fund bailed out Mongolia in February 2017, and leaders have since worked hard to regain the confidence of the international investor community."

For more information or to discuss the Mongolia property market email Oliver Nicoll from Asia Pacific Investment Partners via the contact details below. 

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