A win-win solution

With demand for natural resources set to double over the next 30 years, the global race is on to secure access to much coveted minerals.

Mongolia is one of the 10 countries in the world with the most natural resources, harboring an abundance of gold, copper, iron ore, coal, oil, rare earth elements and much more under the surface of its huge land mass.

Six thousand kilometers away and four-and-a-half times smaller, Germany is one of the biggest consumers of natural resources in the world and is very dependent on imports for energy resources and metals.

This makes for a very good basis for bilateral cooperation.

10th Mongolian-German Forum

As most of the delegates at the 10th Mongolian-German Forum organized by the center-right Konrad Adenauer Foundation in Berlin agreed on Wednesday (28.03), current cooperation between the two countries in terms of natural resources is currently at a very low level indeed.  

However, what they all hailed was the potential.

It was this potential that encouraged German Chancellor Angela Merkel to visit Mongolia last October, as part of the Berlin government's new natural resources strategy, which provides a supportive framework to domestic companies in their endeavor to secure the future supply of minerals.

Merkel and her Mongolian counterpart Sukhbaatar Batbold signed an intergovernmental agreement on cooperation in the raw materials, industrial and technology sectors that is also supposed to promote sustainable economic and social development in both countries.

Former Mongolian President Punsalmaagiin Ochirbat confirmed on Wednesday that the agreement had "created the legal framework for cooperation."

"Now it has to be filled with life," he explained. The first democratically-elected president of Mongolia said that a lot could be learnt from Germany in terms of its experience of decentralized administration and its know-how in hi-tech and renewable energies.

An equal partnership

There is another reason why Mongolia is interested in expanding its cooperation with Germany. Wedged between superpowers China and Russia, the landlocked country is aware of its need to be more independent, as Ochirbat pointed out. This is why "third partners" are being sought intensively, he said. "And Germany is one of these 'third partners.'"

Moreover, this is an "equal partnership" said Manfred Grund from the ruling Christian Democrat Party. It is not a "one-way street" with Germany simply giving money for natural resources, he explained, but an exchange of natural resources for advanced technologies that can be of benefit to both parties.

"It's a win-win solution," he said, adding that "without natural resources there can be no technological progress."

Friedolin Strack from the Voice of German Industry, for his part, noted that another reason why Mongolia was particularly attractive to German business was the fact that it was not only mining and providing natural resources but that it wanted to attract technologies to Mongolia. "Since Germany is less specialized in mining than in processing natural resources, the two can be very good partners."

Ch Khashchulun, the chairman of Mongolia's National Development and Innovation Committee, explained Germany could offer valuable advice on a number of projects, including a coal-chemical plant for clean coal technology. Representatives of six Mongolian firms are due to visit Germany later this year to seek guidance from their German counterparts, he said.

With Mongolia's average annual economic growth rate estimated to be around 14 percent over the next decade, the government has launched a series of ambitious projects.

These include a new international airport by 2015, 2000 kilometers of railways, better highway links, a more sophisticated water supply system for the Gobi region, new housing and a tram and underground system for the capital Ulan Bator, copper plants and many factories.

Impact on the environment

There is a negative side to all these ambitious plans and the mining of natural resources and that is the potentially detrimental impact on the environment, as certain audience members at the forum pointed out.

However, the Mongolian delegates were quick to mention that sustainability and environmental protection were an important aspect of the "building a better tomorrow" project.

Khashchulun said that the goal was that 10 percent of total energy output be provided by renewable energies by 2013 and 20 percent by 2020.

"We want to adhere to European ecological standards," added former President Ochirbat. He also explained that the potential in Mongolia for renewable energies was impressive, with 300 days of sun a year, and the conditions for producing wind energy being good on 60 percent of Mongolia's territory.

With Germany's know-how and support, he hoped, newer, cleaner and technologies would be developed to protect the environment in future.

"Each important historical step promises success but also involves risks," he also said in Berlin.

Both sides clearly feel that with the promise of a win-win solution,
the risks are worth taking and can be dealt with effectively.

Author: Anne Thomas
Editor: Grahame Lucas