Source: www.businessinsider.com                  Date: 09 June, 2011

If you're a true believe in the Chinese growth story, and the voracious demand for commodities that it will represent in the coming years, you can't do any better than Mongolia.  A few meetings in Ulaanbaatar made it clear that the fundamental issue for this landlocked country is whether it will be able to develop the infrastructure, notably transport linkages, to take full advantage of its massive resource wealth. If it does, Mongolia will be to industrial commodities what Saudi Arabia has been for oil – assuming, of course, that the Chinese macro story remains on track.

For now the ramping up of mining developments remains on track. The IMF now expects nominal GDP to reach MNT16.6 trillion in 2013, twice the 2010 level of MNT8.3 trillion. Coal exports are expected to reach 27.6 million tons in 2011, up from 16.6 million tons in 2010 with production of 41.6 million tons expected in 2013. If coal is for now making the running, copper will take over in 2013 with the then anticipated commencement of production in 2013 of the Oyu Tolgoi (OT) field. Mongolia also is rich in gold, oil and assorted “rare earth” plays.

But before all that kicks in, the Mongolian story will have to navigate the inevitable noise of a general election due to be held in June 2012. The present government is an uneasy coalition of the two main parties.