Mongolia, the copper that covers everything

In Mongolia there are more horses than people and traveling on horseback -or camel- is the most common.

Mongolia, the copper that covers everything

In Mongolia there are more horses than people and traveling on horseback -or camel- is the most common. But that is not why this country, three times larger than Spain, is in the crosshairs of sustainable mobility and the green economy.

This week, after more than fifteen years of ups and downs, Rio Tinto has inaugurated, 80 kilometers from the Chinese border, one of the largest and most promising copper mines in the world. A metal whose demand has skyrocketed with the manufacture of electric vehicles, which require 277% more copper than conventional ones. More than 53 kilos per car.

You are reading: Mongolia, the copper that covers everything

Although that could hardly be guessed at the beginning of the century, when the Oyu Tolgoi deposit began to be seriously excavated, exploited in the open pit for more than a decade.

Today the pit reaches a depth of 1,300 meters. And that was where the Mongolian Prime Minister, Luvsannamsrain Oyun-Erdene, and the executive president of Rio Tinto, Jakob Stausholm, traveled last Monday.

Readmore : A 2 a.m. last call on Ottawa patios could soon be permanent

Oyu Tolgoi is a strategic site and, if Rio Tinto soon realized it, the Ulaanbaatar authorities have not lagged behind, forcing constant renegotiations, cheered on by mobilizations and media campaigns.

No en vano, the insatiable appetite of the first electric vehicle manufacturer, China, if you hear it roar across the Gobi desert, at the same time compose the mantra of decarbonisation.

However, environmentalists denounced a decade ago that exploitation was very advanced without even having mediated an environmental impact study.

To these complaints have been added the effects on the nomadic population. The shepherds complain of the exorbitant consumption of water from the mine – which required the diversion of aquifers – which forces them to make increasingly strenuous journeys to water their sheep. Not to mention the effects on endangered native fauna, such as wild asses.

In any case, it is an unequal fight. Not surprisingly, mining provides 90% of Mongolia’s export earnings, where per capita income is a third of China’s.

Readmore : Hedge fund Arini to launch new credit funds as growth outlook worsens -letter

The mine in question provides 20,000 jobs and, according to its defenders, can increase GDP by 30%. When mining reaches its peak at the end of this decade, it will supply the copper needed for six million electric cars annually.

Oyu Tolgoi also contains appreciable veins of gold and molybdenum. The Anglo-Australian multinational says it has already paid some $4 billion to the Mongolian government in taxes and other items. Although it is not clear if this figure includes the cancellation of the debt contracted by the Mongolian state. Your investment is even greater.

The fact is that Riotinto, as the second largest mining multinational in the world, has been able to afford drilling to an unusual depth and successively higher prices. While the Mongolian state, in order to maintain its 34% stake, laboriously achieved, had to go into debt with the company itself. Something that resulted in a national outcry: Rio Tinto was going to make gold with copper. The State, quite the opposite. A deputy declared a hunger strike. In 2021, to overcome the paralysis, Rio Tinto had to forgive the debt.

Likewise, three months ago, for around 2.9 billion euros, Rio Tinto managed to become the sole private partner in the mine, keeping the remains of its Canadian investee Turquoise Hills (formerly Ivanhoe, the pioneer).

Now, the prime minister promises to end endemic corruption and allocate profits and dividends to a sovereign wealth fund “so that they are distributed fairly.” So the fight in Mongolia and its apparent happy ending could herald the future, due to the social turn in Latin America, where countries like Chile concentrate some of the largest copper mines in the world.

Related Posts

This will close in 0 seconds