Source: Eurasia Capital                 Date: 09 June, 2011

The partnership between Mongolia and South Korea has developed significantly since the two countries launched diplomatic relationships in 1990. Bilateral trade has almost quadrupled over the last decade making Asia's fourth biggest economy the third largest trading partner of resource rich Mongolia, after China and Russia. In addition, South Korea is the largest labor market for Mongolians. Estimates suggest that 38,000 to 40,000 Mongolian's live in South Korea.

South Korea is the 4th largest investor in Mongolia with total foreign direct investment (FDI) of over USD255 million since 1990. South Korea is also a key donor to Mongolia, having provided USD137 million since 1990 in committed loans and grants. South Korean companies' major investments and engagements include:

§     Skytel: a JV with South Korean SK Telecom and Mongolians as shareholders

§     Unitel Corp.: a 50/50 South Korean-Mongolian JV that started providing GSM services from 2006

§     Mongolian Telecom: Korea Telecom bought 40% of the company for USD4.5 million at privatization

§     Seoul Group: a property company with the first public luxury residential project in Ulaanbaatar

§     Mongolian Development Bank: Korean Development Bank is expected to be hired as part of the management team to run this newly established Mongolian development vehicle.

Major South Korean companies including state-owned Korea Resources Corp, steelmaker Posco and Korea Electric Power Corp have bid for the Western Tsankhi coalfield, the largest area of the Tavan Tolgoi mine. The South Korean consortium is jointly bidding with Japanese and Russian companies. In March 2011, Lotte E&C-led South Korean consortium signed a preliminary deal with Mongolian Railways to build a 1,040-km railway in Mongolia.