By Mrinalika Roy and Arunima Kumar
March 15 (Reuters) - Mongolia will take a decision on
which part of its territory will be used to construct the
Russia-China gas pipeline once its neighbours reach an agreement
on costs, the country's prime minister said.
Russian energy company Gazprom is planning to
build the 2,600 km Power-of-Siberia 2 gas pipeline to supply 50
billion cubic metres of gas per year to China by 2030.
Mongolian Prime Minister Luvsannamsrain Oyun-Erdene told
Reuters on Tuesday that talks between its two big neighbours had
been put on the back burner due to the Ukraine war, but there
was a likelihood of them coming back to the negotiating table.
After Russia and China decide on the pricing, Mongolia will
decide on how they can use its territory to transport the gas,
Oyun-Erdene said.
Nearly 80% of Mongolia's total exports go to China, but the
mineral-rich country is working to expand trade and mining
relationships beyond China and Russia and hopes to become a
bridge between Europe and Asia.
"We're discussing cooperation in the rare earth elements
sector; having discussions with German and French sites on
copper production, and enhancing our private sector partnership
with the Republic of Korea and Japan," Oyun-Erdene said.
On Monday, the country started its long-delayed underground
production at the Oyu Tolgoi project, in which it has a 34%
stake, with Anglo-Australian miner Rio Tinto owning the
rest.
Oyun-Erdene said the Mongolian government was not looking to
raise its stake in Oyu Tolgoi and was satisfied with the
partnership.
Oyu Tolgoi is slated to eventually produce more than 500,000
tonnes of copper a year and help Mongolia become one of the
largest producers of the metal in the world.
With mining accounting for a quarter of the country's GDP
and around 93% of its exports, Mongolia is implementing reforms
to safeguard its economy from volatility in commodities markets,
the prime minister said.
The government will start a sovereign wealth fund to cushion
itself against raw material price volatility, diversify its
economy and invest more in building infrastructure and
logistics.
"These measures will greatly contribute to balance our
economy and address the issue of volatility," Oyun-Erdene said.
(Reporting by Mrinalika Roy and Arunima Kumar in Bengaluru;
Editing by Anil D'Silva)
