Under the Eternal Sky, Mongolia on Edge of Mining Boom

Multinational mining hordes eye Mongolia’s Earthly fortunes

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After spending several months in the epic clamor of industrializing China, I went to Mongolia looking for open spaces and unspoiled nature, for clean air, for hiking and horseback riding, and for nights still dark enough to terrify.

In the countryside (and most of it remains countryside) the Eternal Sky held sacred by Mongolians since well before the time of Genghis Khan levitates with majesty over wide-open grassland prairie, steppe, subarctic evergreen forest, wetland, alpine tundra, mountain, and desert. It stretches above yak, goat, reindeer, camel, wolf, bear, marmot, squirrel, hawk, falcon, eagle and crane, and above some of the last traditional nomadic peoples and wild horses on Earth.

The seemingly infinite Mongolian sky also hangs over the largest mining boom on the planet.

On my flight from Beijing to Ulaanbaatar, I sat next to a miner named Tim. Tim had a wife and two children back in Nova Scotia, with another on the way. He was trying to convince his wife to relocate to Mongolia, but she wasn’t going for it yet. So his mining career kept him away from his family as he traveled to Colorado, Nevada, Australia, and now Mongolia. Tim kept his taupe outdoorsman’s hat on for the entire flight, but I forgave him for that because he shared his Lonely Planet Mongolia and enthusiastically told me about his work at a new copper mine in the Gobi Desert.

“It’s just a camp now, but we’re investing $40 million this year alone, and when it really gets up and running, it’ll probably become the second largest city in Mongolia,” Tim told me. “It’s going to be huge.”

Tim was almost certainly talking about the Oyu Tolgoi mine, or “Turquoise Hill,” a copper and gold ore deposit in Southern Mongolia that’s larger than the state of Florida. Oyu Tolgoi is the world’s largest mining exploration project, a joint venture between a Canadian company named Ivanhoe and the Mongolian government, with significant financing from Chilean mining giant Rio Tinto. Together, they plan to invest $5 billion into operations in the next few years, making Oyu Tolgoi the largest foreign investment in Mongolian history. Over the forecast 65-year lifespan of the mine, its revenues are expected to become a third of Mongolia’s gross domestic product. It’s a big deal, and the discovery of it and a wealth of untapped deposits of coal, gold, silver, tin, uranium, and “rare earth minerals” used in most of today’s advanced electronics has mining-industry shills proclaiming Mongolia the next “Saudi Arabia of insert-name-of-precious-metal-here.”

Despite projections that the mining boom is expected to triple or quadruple the size of Mongolia’s economy in the next five years, times are tough for most Mongolians, and the relationship between the country’s great natural resources and the wealth of its people is still to be determined. The United Nations estimates that 27 percent of Mongolia’s urban population lives below the poverty line. In rural areas, nearly fifty percent of people live in poverty. During the past decade, a series of unusually severe zuds – storms that turn winter snow cover into solid ice, causing the mass starvation of livestock – has had a devastating effect on a country where a quarter of the people make their living (or attempt to make their living) raising livestock.

And so, like people in many other impoverished nations, Mongolians are choosing between remaining with their traditional ways or mortgaging their natural resources.

“Living off the cashmere is not economically sustainable. But is living off mining sustainable?” says Onodelgerekh Ganzorig, director of the Mongol Environmental Conservation (MEC), an Earth Island Institute-sponsored project that works to preserve the environment and cultural heritage of the country. “Half of Mongolians say ‘Yes, we want mining.’ But the other half that lives off the land is saying ‘No, we don’t support it, because it’s going to destroy this whole area and we’re not going to have grazing lands or pasture lands.’”

Mongolia today is the least densely populated country in the world, with four people per square mile. But before I could get to the countryside, I needed to spend several days in Ulaanbaatar (“Red Hero,” UB in local slang), the capital city. In the past decade, a combination of economic and climatological disasters have forced many Mongolians from rural areas to seek opportunity in UB, and the city has swelled improvidently, from the 300,000 it was originally designed for to around a million today, or roughly a third of the country’s entire population. Except for a mercilessly short window of summertime with snatches of clear skies and almost hyper-real clouds, UB is dusty and void of vegetation. The city is filled with block after block of concrete apartment buildings with paint peeling from exposure to the extreme cold and dryness of winter. Dust storms frequently whip through the city.

Even when it’s still the air quality is atrocious. The belching exhaust towers of UB’s two major coal power plants dominate an otherwise monolithic concrete skyline. Around the perimeter of UB are ger (yurt) “suburbs” where smoking tin exhaust pipes rise from a sea of circular cloth roofs. The city’s many poor have small stoves they use constantly to cook and keep warm with throughout the long winter in the coldest national capital city in the world. Sometimes they burn trash – wood, furniture, tires. But mostly they burn the same coal as the city’s power plants. Today, a fair number of UB’s residents refer to the city in winter as “Utaanbaatar” – “Smog Hero.”

My UB host, guide, and driver, Bogi (“Crystal”), grew up in a nomadic family of herders in western Mongolia. She is 24, and somewhat typical of her generation: She’s left her family’s traditional way of life in the countryside to pursue opportunities in the city. Bogi is lean yet wide-shouldered and has straight black shoulder-length hair, dark eyes, and strong, high cheekbones. To keep her hands from tanning like those of a country person, she wears lacy white-sleeved gloves when she drives. Bogi teaches English for much of the year, but in the summer she runs a traveler’s hostel and gets up at 4:30 a.m. to meet travelers disembarking from the Trans-Siberian railroad.

On my third day in Mongolia, Bogi drove me out of the city to look for a ger to rent from a nomad family somewhere in Gorkhi-Terelj, a national park and protected area two hours northeast of UB. We bumped over a mix of unpaved dirt and marginally more paved roads, and Bogi assured me that finding a ger would simply be a matter of driving into the countryside, locating a family, and negotiating room and lodging. And she was right – more or less. Mongolians have a well-earned reputation for being hospitable to travelers, and theirs is a land largely without fences. It’s still possible to rent or buy a horse and ride from ger-to-ger across a great deal of the country. Finding lodging in traveler-oriented Gorkhi-Terelj would be easy.

After one unsuccessful stop, we drove up to a group of teenagers and a young man on horseback near a large rock formation. Bogi exchanged a few words with the man on the horse, Baul (ba-OOL), who had ruddy wind- and sun-burned cheeks and wore a long, blue, high-collared robe tied together at the waist by a thick yellow silk sash. He gestured for us to follow him as he galloped his horse up the road. We drove to a farm with two livestock pens, three gers, and a satellite dish. A bargain was soon struck with his family for me to stay and be fed for two weeks for $17 per day.

In the car ride out, Bogi had asked about my desire to live in a ger, and seemed incredulous that an American would want to stay in one for two weeks. “Mongolia,” I said, squinting my eyes against the dust, “is beautiful.” At this, Bogi snorted, “I am from the country, so it is no big deal to me.” Still, long after the details of my stay were ironed out Bogi lingered for several rounds of salty yak-butter tea and Mongolian fry bread. As the circle of sky at the top of the ger grew dim, she was still there.

Bogi told me the family is nomadic, but that they mostly stay in Gorkhi-Terelj in summertime so they can take on visitors like me and make money. Over the next two weeks, in the course of a horse ride, rounds of vodka, and many heated games of chess with Baul, I learned – through sign language, and some rudimentary shared “Monglish” – that the family is putting their other son through graphic design college in UB. I also learned, through sharing my MP3 player with them, that Baul and his family really like the music of Lady Gaga. Mines and markets may be swayed or stalled, but resistance to Gaga is futile.

Pop culture is just one of the ways that Mongolia’s nomadic herders are connected to the broader world. Though it might surprise many people, the vagaries of the global economy also reach to the most remote plains of Mongolia. As the world’s markets contracted during the past two years, global prices for cashmere wool – herders’ most valuable product – fell. Many herders in Mongolia had grown increasingly to depend on the higher margins of cashmere sales, and had begun raising a higher proportion of goats for cashmere due to its profitability on the world market. But goats are insatiable grazers who can lay bare entire swaths of delicate grasslands and worsen Mongolia’s already serious problem with desertification.

“There have been droughts and zuds before, and lots of animals have starved before,” Ono from Mongol Environmental Conservation says. “The herders survived. It’s not just that there’s overgrazing. It’s now a matter of how to make money, so when we talk about sustainability, are we talking about environmental sustainability or economic sustainability?

“And then you have the government in the middle,” Ono said later. “And who do you think they support?”

A good idea of what the government supports can found in the words of Mongolia’s Prime Minister, Sukhbaatar Batbold, who appeared on the Charlie Rose show in September 2010 and said: “We are already the Number Four exporter of coal to China. We are a quite serious exporter of copper to China, and with our copper and gold project with Rio Tinto, we would easily double and triple [copper] exports to China. There is huge potential. On top of that, we have new commodities to export to China – iron ore, zinc – and we do have some prospects for oil and gas and important reserves of uranium.”

Mongolia’s government may safely be described as pro-mining. It wants to develop the mineral resources of its country – and it expects to gain significant economic, social and political benefits from expansion of the mining sector. Government officials want the $5 billion coming into the Oyu Tolgoi copper and gold project, and they want the massive Tavan Tolgoi coal project, the Boroo hard rock gold mine, the copper and molybdenum operation at Erdenet-Ovoo, and another copper/molybdenum mine, the Tsagaan Suvarga. They want the Nalayh coal mine in the north, the Oyut Ovoo in the south-central part of the country, and the Zaamar gold mine dredging operation on the Tuul River. They want the Dornod uranium mine and the Asgat silver mine. The Mongolian government wants revenue from its recently renewed uranium exploration and extraction ventures with Russia and Japan.

Government officials are also eager to attract big, mining-related infrastructure projects. Mongolia is partnering with a Finnish mining technology company, Outotec, on a massive project to be located in Sainshand that will smelt copper, process coal, and form part of a new railway estimated to cost more than $2 billion to build.

Regardless of whether the country wants them, Mongolia is also welcoming the dangerous jobs and social problems that typically plague mining operations. Mining towns begin as small camps that often become quite large, with little planning or civic impulse. An overwhelmingly male workforce comes for work in the mines while many women, faced with few other economic opportunities in such places, turn to sex work. HIV/AIDS and other STDs often blossom. In a global economic system, where laws of supply and demand reign supreme, mining export economies attract huge amounts of foreign money into an economy, causing inflation and damaging other sectors of the industrial economy, a phenomenon sometimes called “Dutch Disease” that can be understood as “too much wealth managed unwisely.”

Despite such drawbacks, the most salient question for Mongolians today is not whether mining should occur there.

“There’s no point to [that question], because it’s happening anyway,” Ono says. “I’ve worked on different mining-related projects for a long time. We fought for eight to ten years to stop mining companies, and it doesn’t happen. Why? Because it happens with or without you. Because it’s what the other half of the people want. It’s an economic development concept.”

The practical question, then, becomes how to have mining operations without losing other important environmental or cultural resources. At this point, harm reduction is the best that Mongolian environmentalists can do, by trying to see strong government regulations are in place – and enforced. Ono describes the main mission of the MEC as bringing together all stakeholders to talk about environmental issues: “In Mongolia, we have representatives from all sectors as advisors to our project, including the State Secretary of the Ministry of the Environment, and the President of the Academy of Sciences, who’s also an advisor to the Prime Minister. We have the water authority and the government agency and the scientists under the water authority. We have representatives from mining companies, and representatives from grassroots and reclamations services. We have eco-tourism representatives. What our program does is bring representatives from all sectors so they’re sitting around one table and acting everything out and working out solutions together.”

Even in a country with advanced environmental laws and strict enforcement, the very best case scenario for a mine involves an accident-free exploration and extraction phase followed by an aggressive long-term, well-funded reclamation plan that creates some approximation of the natural order that went before. There is no single worst-case environmental scenario for a mine. It could be staggering levels of water consumption, poisoned watersheds, or toxic silt-choked rivers that asphyxiate fish. It could be gaping open-pit mines and a surrounding dead zone created by any number of toxins leaching into the ground, or areas known in the mining industry as glory holes, where “block-caving” operations, which involve blasting deposits into tunnels dug below, create large areas of permanently unstable earth on the surface.

Mongolian and international environmentalists are warning that large-scale mining in Mongolia will likely lead to such problems. Profit rarely waits for caution. “With mine reclamation tactics, boom-and-bust is a proven. There just aren’t a lot of examples of success in post-mining land use,” says Paul Robinson, Research Director at the New Mexico-based mining watchdog organization Southwest Research and Information Center, and an environmental analyst with years of experience working in the Lake Baikal region that straddles the border of Russia and Mongolia. “Mining companies are designed to go out of business. They form operating companies for specific mines. The main companies are never liable, so the [reclamation] commitments they make are not in good faith.

“What we need to be doing,” Robinson says, “is contemporaneous reclamation. Complete environmental impact assessments and project plans to review before any mining starts, so the full cost of reclamation is factored into the budget of the mine, and reclamation costs can be paid up front, as a deposit.”

Ono agrees. “For the last years, it’s been a vicious cycle. We try to stop them, maybe we stop them, and they start operating again faster, doing more harm to the environment and then running away. We’re looking into what standards they’re following before they start operating.… You can’t stop all mining, but what you can say to mining companies is, ‘If you cannot operate safely there in that river, then you cannot operate there.’ People argue with me sometimes that the legal system is corrupt, and yes, the legal system is corrupt, but we have to be able to show something scientific, and be able to say ‘This is the problem legally,’ so it’s not just personal passions.”

Ah yes, corruption. Several days into my stay in the countryside, I read a copy of the English-language Mongolian Messenger newspaper I’d brought from UB. In addition to a metal-centric commodity price listings index on the front page, my edition of the Messenger featured an article entitled “Officials Defend False Income Declarations,” with this choice report: “The Anti-Corruption Agency found that [provincial] Governor Ts. Janlav did not declare his private house where he now lives, four apartments which are owned by his family members, [a] building with purpose for small-enterprise, 50 million [Mongolian, almost US$40,000] income from selling his two-story private house, as well as 23 percent of shares of Dornod Company that is owned by his wife.”

So, can Mongolia’s young government, commercial institutions, regulatory infrastructure, and civil society manage their mining boom in a way that doesn’t involve extreme degradation? Can they promote inclusive economic growth that lifts a majority of Mongolians, or builds for a post-mining future? It’s possible – mining law and reclamation policy have come a long way fast in other parts of the world – but such growth requires stability. The Mongolian Ministry of Nature and Environment has been reorganized five times in the past 20 years. According to a World Bank overview, Mongolia’s “deteriorating environmental situation is exacerbated by irresponsible vested interests, poor coordination among ministries and agencies, inadequate monitoring of natural resource conditions and weak enforcement of environmental regulations.”

I sighed, put the bad news down, and took a long walk away through floodplains and over rolling steppes. The scale of things in Gorkhi-Terelj is more suited to horseback riding than to walking, but I was a happy speck moving slowly through dung-maculated valleys full of the bleached skulls, spines, and other stray bone bits of departed animals. Daurian redstarts, Siberian blue robins, and black kites flew near to me along my way. The birds that perched did so near enough that I could have touched them with my hand, and they looked at me inquisitive and unafraid.

With the sun sinking perilously low on the horizon, I descended from the hills, through birch and larch forest, and picked my way through moist lowlands, across tufts of earth-like lily pads. I arrived just before night fell, and Baul stoked the wood stove and brought hot milk tea his mother had made. I sat drinking it, listened to the silence, and watched the last blue of the sky fade in the circular hole in the center of the ceiling.

On my flight out of the country, I sat next to another miner, an American executive named Robert, on his way from gold mining in Mongolia to an oil drilling gig in Kazakhstan. Robert was happy to talk about his business, about corruption and bribery, and about how “risk averse” US and European mining companies were losing out in the resource wars to their more daring Chinese and Russian counterparts. He shared some sordid mining stories about Nigeria, Mexico and … Afghanistan? Did the U.S. have mining operations in Afghanistan?

“Oh yeah,” Robert said, leaning in confidingly: “The Chinese just won the largest copper mining bid in the world there after bribing a bunch of Afghan officials, but that’s not even the worst part.” He paused for dramatic effect, then continued: “The worst part is that it’s the US providing military protection for the Chinese to do it!”

But that’s another story, isn’t it?

Brian Awehali is an award-winning journalist and former Britannica.com editor, who founded the magazine, LiP: Informed Revolt and edited Tipping the Sacred Cow (AK Press), an anthology of the magazine’s best work. His blog lives at loudcanary.com. He is a tribal member of the Cherokee Nation of Oklahoma.

Photo: Brian Awehali

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