Here is an article on investment in Mongolia from The UB Post last month. The adverse effects of the Windfall Tax law are mentioned as expected, but there are also some surprises, such as concern over the railway and the idea to export energy to China.
"Entree Gold has drawn-down their investment by around 50 percent since 2002. The Western Prospector Group withdrew over US$3 billion capital outlay from the country after the windfall profits tax was adopted hastily last year...
"There are 15 strategically significant mineral deposits, where government participation is indefinite...
"Another barrier in trading with Mongolia is surface transportation links. Most of the cargo traffic is carried by the railway. Mongolia’s railway gauge is different from Chinese railway system, which has a standard gauge of 1,435 mm while it is 1,524 mm in Mongolia. Each carriage has to be lifted in turn to have its bogies changed...
"'We are looking principally at four sectors of the Mongolian economy. The first one is upgrading the railway. It would cost US$129 million to upgrade and increase the capacity of the railway system. It’s considered to be a key constraint of the Mongolian economy’s growth,' said James Hallmark, Millennium Challenge Corporation’s Country Director for Mongolia...
"'The windy southern province in Gobi, which shares a border with China on the south, is a good place to build wind power stations and export the energy to China... We should export energy to China rather than coal,' said Alan Fontaine, CEO of Newcom Group."
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