Архив рубрики: Opinion

China says no Brahmaputra diversion — is there hope for Argun and Amur?

Argun, Shilka and Amur river ecosystems- are all threatened by water infrastructure planned or already built by China. China still refuses to discuss with Russia agreement on environmental flow on Argun River, that may soften impacts of Hailaer-Dalai massive water diversion. State-owned Yangtze Power Co. together with En+Company propose to dam Shilka River near its mouth. And all Chinese national development plans still have 3 to 9 most dangerous dams on the Amur River transboundary channel. However RwB must acknowledge that Chinese policies on transboundary rivers gradually become more open and this great country becomes somewhat more sensitive to concerns of its neighbors. But to be heard these concerns should be voiced loudly and at the high level of political pyramid. India has been very edgy ever since reports that China meant to divert the waters of Bhramaputra river towards the parched provinces in the north-east, or even Xinjiang in the north-west. Brahmaputra River diversion story told by The «Times of India»  is very far from the happy end, but offers some hope for the future. RwB

Indrani Bagchi, Oct 14, 2011

In a rare admission which will be welcomed in India, China has stated that it will not divert the Brahmaputra river.Jiao Yong, vice minister at China’s ministry of water resources, told a press conference in Beijing on Wednesday that although there is a demand among Chinese to make greater use of the Yarlung Tsangpo (Tibetan name for the Brahmaputra), «considering the technical difficulties, the actual need of diversion and the possible impact on the environment and state-to-state relations, the Chinese government has no plan to conduct any diversification project in this river».

This is the first time that China has acknowledged that anything that spoils relations with India over the Brahmaputra does not serve any interests.

The official clarification will be a relief to the Indian government, which has repeatedly harangued the Chinese side on the proposed diversification project. Returning from the UN General Assembly on September 27, Prime Minister Manmohan Singh told journalists, «I have myself raised this issue with both the President as well as the Prime Minister of China on a number of occasions. They have assured us that they are not doing anything which will be detrimental to the interests of India.»

Indian and Chinese experts discussed the fate of trans-border rivers as recently as May 2011 in Beijing. The Chinese statement will go a fair distance in removing a growing irritant between India and China. India has been very edgy ever since reports that China meant to divert the waters of this mighty river towards the parched provinces in the north-east, or even Xinjiang in the north-west.

The idea was first raised in a provocatively titled book, ‘Tibet’s water will save China’, by two retired PLA commanders, Gao Kai and Li Ling.

Independent hydro-experts have also suggested that it would be an almost impossible technical feat to divert the Brahmaputra. After alleged misadventures on the Three Gorges Dam and Mekong river in southeast Asia, there is less of an appetite to venture into a project that could prove to be very risky.

However, the diversification project is distinct from the dams that China has started to build on the Brahmaputra. While there is some consternation on that in India, China has clarified that these are run-of-the-river projects. India is not protesting too much here because these are the kind of dam projects India is building on the Indus rivers that India shares with Pakistan. China is believed be building six dams — Lengda, Zhongda, Langzhen, Jiexu, Jiacha and Zangmu.

In November 2006, on the eve of Chinese President Hu Jintao’s visit to India, Chinese water resources Wang Shucheng was quoted as saying that the diversion proposal was «unnecessary, unfeasible and unscientific. There is no need for such dramatic and unscientific projects.» But that did not assuage Indian concerns.

China expert Claude Arpi says, «If a river water treaty could be signed between India and Pakistan in the early sixties, why can’t a similar agreement be made between China, India and Bangladesh?»

Times of India

President of the Mongolia Mining Assossiation Criticizes New Law

After the 14 th North America-Mongolia Business Council Conference  D.Ganbold, President of the Mongolian National Mining Association, discussed with journalists the Government of Mongolia have budget to compensate over 1000 mining exploration companies?Q: Your presentation at the North America-Mongolia Business Council conference was interesting and in the presentation, you made analysis on the amendments in four laws that affected mining industry. What were the main obstacles or advantages of these amendments?D.Ganbold: There are better and worse provisions in the mining law amendments in relationship with the OT IA(Oyu Tolgoi Implementation Agreement-ed.). The repeal of WFP (windfall profit) tax is the biggest gain of these changes. Also some laws such as «Law on prohibiting exploration and mining minerals from river source protected water and forest reservoir areas» and «Law on Nuclear Energy» will bring more problems in the future. «Law on Nuclear Energy» breaches many domestic laws and also international laws, agreements, even the Constitution of Mongolia. Upon approval of this law, interest of mining many companies and their investors is under risk. Share is private property. It is regretful that the Government of Mongolia stated to own this property free. Also the law was adopted to divide authorities of state registration and cadastre. These provisions are impossible for the professional operations many disputes are awaiting in relationship with this provision. Also it failed to state the solution to probable disputes.

Q: When drafting these laws, did lawmakers receive comments from you and professionals?

D.Ganbold: As for «Law on prohibiting exploration and mining minerals from river source protected water and forest reservoir areas» and «Law on Nuclear Energy», we made neither single comments nor a second of time to comment. Minister D.Zorigt is working very closely with mining NGOs and private sector. But as for these laws, they were carved without professional touches or comments.

Q: Lawmakers believe that «Law on prohibiting exploration and mining minerals from river source protected water and forest reservoir areas» will become impetus in the protection of environment. But you see it as negative.

D.Ganbold: It will not protect the environment; actually it will bring negative impacts. When the law was developed, it would affect over 200 licenses, but now this number is increased by 4-5 times. If the exploration licenses of these companies were cancelled accruing to a new law, the Government shall compensate these companies, according to the Mineral Law of Mongolia. But does Government of Mongolia have such a huge amount of money? Let’s take one example, there is a calculation that «Monpolimet» company, which faces the risk of losing its license, spent 50 million US$, also «Erdes Holding» LLC, iron ore mining company, spent 20 million US$, respectively. It is excluding exploration expense. Compensation risk of only two of a thousand would reach over 100 billion MNT.

Actually, exploration expense is the risk of license holding company. But now the Government would pay the payment. Actually, confiscated licensed areas will become the prey of «ninjas», unofficial name of artisan miners. Wouldn’t it affect the environment?

Wednesday, 02 Nov 2011  Source:www.business-mongolia.com

RwB would dare to ask the President: «If not a single comment was made by miners who in spring 2011 proposed amendments making the Law practically useless?  Coalition members had to spend a lot of energy to prevent them from being passed, so we would really like to know who authored them»

Water As A New Weapon

China has aroused international alarm by using its virtual monopoly of rare earths as a trade instrument and by stalling multilateral efforts to resolve disputes in the South China Sea. Among its neighbours, there is deep concern at the way it is seeking to make water a political weapon.

At the hub of Asia, China is the source of cross-border river flows to the largest number of countries in the world — from Russia to India, Kazakhstan to the Indochina peninsula. This results from its absorption of the ethnic minority homelands that make up 60 per cent of its land mass and are the origin of all the important international rivers flowing out of Chinese territory.

Getting this pre-eminent riparian power to accept water-sharing arrangements or other co-operative institutional mechanisms has proved unsuccessful so far in any basin. Instead, the construction of upstream dams on international rivers such as the Mekong, Brahmaputra or Amur shows China is increasingly bent on unilateral actions, impervious to the concerns of downstream nations.

China already boasts both the world’s biggest dam (Three Gorges) and a greater total number of dams than the rest of the world combined. It has shifted its focus from internal to international rivers, and graduated from building large dams to building mega-dams. Among its newest dams on the Mekong is the 4,200 megawatt Xiaowan — taller than Paris’s Eiffel Tower. New dams approved for construction include one on the Brahmaputra at Metog (or Motuo in Chinese) that is to be twice the size of the 18,300MW Three Gorges — and sited almost on the disputed border with India.

The consequences of such frenetic construction are already clear. First, China is in water disputes with almost all its neighbours, from Russia and India to weak client-states such as North Korea and Burma. Second, its new focus on water mega-projects in the homelands of ethnic minorities has triggered tensions over displacement and submergence at a time when the Tibetan plateau, Xinjiang and Inner Mongolia have all been wracked by protests against Chinese rule. Third, the projects threaten to replicate in international rivers the degradation haunting China’s internal rivers.

Yet, as if to declare itself the world’s unrivalled hydro-hegemon, China is also the largest dam builder overseas. From Pakistan-held Kashmir to Burma’s troubled Kachin and Shan states, China is building dams in disputed or insurgency-torn areas, despite local backlash. Dam building in Burma has contributed to renewed fighting, ending a 17-year ceasefire between the Kachin Independence Army and government.

For downriver countries, a key concern is China’s opacity on its dam projects. It usually begins work quietly, almost furtively, then presents a project as unalterable and as holding flood-control benefits.

Worse, although there are water treaties among states in south and south-east Asia, Beijing rejects the concept of a water-sharing arrangement. It is one of only three countries that voted against the 1997 UN convention laying down rules on the shared resources of international watercourses.

Yet water is fast becoming a cause of competition and discord between countries in Asia, where per capita freshwater availability is less than half the global average. The growing water stress threatens Asia’s rapid economic growth and carries risks for investors potentially as damaging as non-performing loans, real estate bubbles and political corruption.

By having its hand on Asia’s water tap, China is therefore acquiring tremendous leverage over its neighbours’ behaviour.

That the country controlling the headwaters of major Asian rivers is also a rising superpower, with a muscular confidence increasingly on open display, only compounds the need for international pressure on Beijing to halt its appropriation of shared waters and accept some form of institutionalised co-operation.

The Financial Times 

China Daily visits the land of eternal blue sky

 The China Daily recently published a very controversial piece on Hulunbeier Grasslands highlighting well familiar problems.

China’s Inner Mongolia Autonomous Region beckons travelers with its fabled undulating fields of grass, fascinating Mongol customs and a scenic Russian border area that teems with trade. Yao Minji pays a visit.

We have a small forest, the Greater Hinggan Range, which extends 1,220 kilometers from north to south in Inner Mongolia Autonomous Region and Heilongjiang Province.

We have a small river, the Argun River, which extends 1,620 kilometers and divides China and Russia.

We have a small cadre, Genghis Khan, who established the Mongol Empire, the largest contiguous empire in history.

These sweeping understatements are used by locals of Hulunbuir City to introduce to us their hometown, humbly and proudly, when we arrived at Hailar District, the administrative center of the vast grassland.

The city, in northeastern Inner Mongolia, is larger than most Chinese provinces and is recognized as the largest city in the world in terms of area. Since it’s so large, it often takes two or three hours to drive from one tourist destination to another.

The region is best known as the Hulunbuir Grassland, one of the most beautiful grasslands in the world where many nomadic groups, including China’s Mongols, originated.

This is also where ancestors of Genghis Khan established their tribe and where the great emperor fought for many years and was said to be buried. Mysteries swirl around Genghis Khan, who conquered most of Eurasia in the 13th century. He is now considered a hero who united the ethnic tribes in the area; one of the biggest mysteries is the location of his burial site.

It’s supposed to be somewhere in the grassland. Legend has it that after he was buried Mongols used dozens of horses to trample and flatten the ground, and it was guarded by hundreds of soldiers until the grasses at the site grew back and were identical to all the other grass. It became invisible

But in order for people to worship there, herders killed lambs in front of their mothers so that the traumatized ewes would never forget the location. Whenever it was time for worship, people just followed the sheep to the slaughter site. After the sheep died, the location was hidden forever.

The grassland and the many towns and cities it encompasses have long been recognized as magnificent travel destinations but large-scale and planned tourism development in most parts only began in 2007.

That means there are limited tourism resources in terms of service, transport and accommodation. For those who don’t like big development, commodification of Genghis Khan and Mongol culture, tacky souvenirs and shops, this is a good thing.

Even at the most popular destination, such as Hulun Lake, near the Shiwei Russian Ethnic Township, we didn’t find street souvenir vendors that crop up everywhere else in China.

The majority of this place is very much how nature really is, without much human interference.

If you’re looking for five-star hotels and luxury boutiques, this is not for you, though many hotels and restaurants have been built over the past five years. But be warned, five-star development is surely coming.

So see this wonderful place while it is unspoiled.

This is the place for those who are interested in nature and culture and have studied a bit of Mongol culture, its rules and taboos, beforehand. You can drive freely, stop whenever you like and wander around, eat whatever is available, stay wherever you can find lodging, even a yurt. It’s a place for those who want to dump urban life for a couple of weeks and enjoy the beauty of the grasslands.

Before the trip, I had imagined a vast, intense green grassland with no borders, grass growing above knee-height and bending like ocean waves in the wind. I imagined intense green land and a dome of intense blue sky with white clouds. And, of course, herds of cattle, horses and sheep. A few simple Mongolian yurts.

During my six-day trip, I saw much of what I had imagined, but what was supposed to be beautiful, verdant prairie was rather disappointing. Nomads told us that July should be the best season when grasses grow high above the knee, but that hasn’t happened in most parts of the great grassland in the past few years because of worsening drought, caused by industrial pollution from big coal mining (many surface mines also encroach on grasslands), over-grazing and increasingly dry weather.

When we arrived in early July, nomads had welcomed the first rain since spring and most of the grass was only ankle-high.

We also learned that Hulun Lake and Buir Lake, for which the grassland is named, have been shrinking for years. The storage level of Hulun Lake has dropped 4.6 meters since 2000, and the whole area of the lake decreased by 20 percent from its historic high; storage capacity is only half what it once was.

The shore of Hunlun Lake retreats around 100 meters every year, and is now more than 1,000 meters away from its original place. What was once a small cabin on stilts above the water now stands lonely at the shore, a few hundred meters away from the lake.

Over six days, we visited Hailar District, the administrative center; Ergun City, which contains a wetland park; Shiwei Russian Ethnic Township, and Manzhouli City, the busiest land port of entry in China (from Russia) and one of the most prosperous cities in northeastern China.

Grassland pearl

Long known as the «Pearl of the Grasslands,» Hailar District is one of the more populated areas in Hulunbuir Grassland and its administrative center.

More than 80 percent of the population is Han people, but respect for Mongols is evident in local policies and in daily life. All street signs are in both Mandarin and Mongolian. The largest newspaper publishes an edition in Mongolian.

Although Mongols in China have adopted some Han customs over hundreds of years, there are still cultural distinctions and taboos that strike visitors.

For example, dogs are loyal partners and friends for nomads, and one must never insult or beat a dog. Of course, dogs are not eaten, as in most parts of China.

Mongols have long believed in Tengriism, a Central Asian religion that combines shamanism, animism, totemism and ancestor worship. Ethnic Mongolians still pray to Munkh Khukh Tengri, the Eternal Blue Sky, and Mongolia (both the region and the country) is sometimes called the land of eternal blue sky. All things in the universe are revered and harmony between man and nature and among men is emphasized.

Visitors need to be sensitive and not show disrespect. For example, fire is especially revered, so it is forbidden to throw trash or cigarette butts into a fire. Do not step on exposed tree roots because that is considered an insult to tree spirits.

Arriving at a nomad’s yurt, visitors are treated graciously, and guests are likely to be served noodles instead of meat, as a sign of respect. For people of the grasslands, grain is far more valuable than meat, which is common.

We drove for about 50 minutes from Hailar to a nearby grassland where Mongols reenact the scene of Genghis Khan and his tribe settling down. A dozen Mongolian yurts stand there.

We were welcomed with beautiful songs and three shots of strong rice wine. Before drinking, it is customary to pay respect to the «eternal blue sky» and the ground by first dipping a finger into the wine, rising the finger to the sky, and then point to the ground. The ritual is more elaborate for Mongolians.

The main activity at this destination is the worship of aobao or cairn (man-made piles of rock). Aobao means piles of stones in Mongolian. In the ancient times, when nomads crossed the grassland, they would leave rocks along the way as markers so they could find their way back. Over time more travelers added more rocks, which became tall piles of stones, or cairn, and they took on a religious significance.

Worshipping aobao is a major and serious activity. One picks up a rock from the ground and wraps it with a strip of cloth. One then makes a wish to the cairn and walks around it clockwise three times. The ceremony is finished when the stone is tossed on top of the cairn, adding to the pile of prayers.

At Hailar District, we also visited the World Anti-Fascist War Memorial, built at the site of a sprawling underground Japanese fortification. During 1930s, the area was occupied and fortified as part of Japan-controlled Manchukuo, a puppet state in northeastern China.

Japanese occupiers enslaved and then massacred more than 10,000 Chinese who built five huge underground bunkers in Hailar District. Since all the Chinese involved in the construction, including translators, were killed, it was not known until the 1970s, when the one and only survivor, who was left with one blind eye, told the story.

The highlight of the memorial is a 500-meter-long trip into the underground bunker, whose ceiling is 15 to 20 meters below the surface. The temperature inside is 20 degrees Celsius cooler than on the surface. The dark and eerie underground area includes bedrooms for generals, dormitories for soldiers, cipher rooms, kitchens and toilets, storage space for food and weapons and other spaces. Most of the huge and complex structure has not yet been developed by the district.

The memorial uses hundreds of pieces of sculpture to depict how the allied army of the Soviet Union, China and Mongolia fought the Japanese. The sculpture depicts soldiers, tanks and aircraft.

Manzhouli City

On the streets we saw more Russians than Chinese since Manzhouli City is China’s biggest port of entry on land. There are frequently organized trips between the two countries.

The streets were filled with long-distance buses with Russian license plates, stores with Russian signs, and Russian tourists who were very familiar with the city.

Tourism is so lucrative that the city has attracted many souvenir-store owners from other parts of China, including the famous city of Yiwu, Zhejiang Province. Guides told us not to enter stores with signs only in Russian (Cyrillic ) since they are intended for foreigners only and the prices are more expensive. Some owners may refuse to sell to Chinese. Stores with signs in both languages are intended for visitors from all countries.

The guide told us that in 2006 and 2007, at the city’s busiest, a train crossed the border every 10 minutes, mostly carrying wood and coal in bilateral trade (China selling wood from its Greater Hinggan Range).

The trade slowed in the global economic downturn in 2008. Today trains cross about every hour.

The downtown is so prosperous it can be called a metropolis, with striking night scenes of glittering lights. It’s planned in an orderly street grid. Planners gave themes to each of a few major avenues and renovated buildings to match the names: Russia has an onion-dome, and other buildings are baroque, Italian and French.

Matryoshka (colorful nested dolls) Square is filled with matryoshka sculpture of all kinds and sizes. At night it’s lighted up, creating a fairy-tale ambience.

Ergun City

Around three hours’ drive from Hailar District is the Shiwei Russian Ethnic Township, selected as one of China’s 10 Charming Towns by China Central Television in 2005.

The town of around 1,800 residents is separated from Russia by the Argun River. Around 63 percent of the population are of mixed Chinese and Russian heritage. The main attraction is a Russian-style dinner and performances by Russian dancers.

Visitors can take a cruise along the Argun River where a Russian town is visible in the distance. More tourists are arriving and many wooden inns were under construction to provide accommodation.

Ergun City also contains a wetland park, with an undisturbed national eco-system.

EN+ refuses to talk to Rivers without boundaries

 South China Morning Post  published Eric Ng’s  new article «Russian to relaunch HK debut next year» on attempts of Eurosibenergo to raise money for hydropower development in Russia and its claims about «highest environmental standards».

EuroSibEnergo (ESE), the power unit of Russian oligarch Oleg Deripaska’s energy and resources conglomerate EN+ Group, plans to relaunch its shelved Hong Kong initial public offering next year while it pushes ahead with feasibility studies on proposed power projects in Siberia with China Yangtze Power.

Russia’s largest privately owned power producer is also holding discussions with environmental groups to address their concerns about potential damage to the environment from the planned damming of ecologically sensitive rivers in East Siberia, according to EN+ deputy chief executive Jivko Savov — although two such groups deny having been consulted.

«Certainly next year is on the cards, but I don’t have a specific date,» Savov said of the listing. «Globally, investors are taking a wait-and- see stance. Our IPO is not driven by external factors so we can [wait].»

The company shelved its IPO in November last year and again in March this year, due to a lack of interest in the firm’s shares at its offer price, and unfavourable regulatory changes in Russia’s power market. It had hoped to raise up to US$1.5 billion, much of which was intended for the retirement of a US$1.4 billion loan owed to Russia’s Sberbank.

A successful float would allow it to restructure debt and cut hefty interest rates on a five-year loan refinancing agreement signed during the 2009 global financial crisis. It was estimated by listing underwriter BOC International to have a net debt-to-shareholders’ equity ratio of 146 per cent at the end of last year.

According to another underwriter, VTB Capital, the interest rate on the loan was to rise from five per cent last year to eight per cent this year and to 19 per cent next year before falling gradually to 11.3 per cent in 2015. The bank was also entitled to up to an extra one per cent per year on the loan amount as long as the aluminium price exceeded US$2,000 a tonne — as it has for most of the time since the refinancing. Aluminium smelters are a major customer.

But Savov said debt refinancing «was never the major driving force behind the IPO,» adding that the key objective was company development. Strong operating profit growth this year and last year meant the company could «afford … to wait for a year or longer» before refinancing.

Still, he noted an unexpected cut in power prices for generators and new caps on price hikes by distributors earlier this year — widely seen as a move by Russian President Dmitry Medvedev and Prime Minister Vladimir Putin to appease voters ahead of next year’s presidential elections — has dented investor confidence in Russia’s power sector.

The price cut for generators meant they had to wait one to two years longer to get back their investment, he said.

«But the fundamentals of the market have not changed, Russia still needs to upgrade and build more power facilities,» he said, adding ESE, as the only power producer in Russia not bound by obligatory power plant construction, fared better than its mostly state-backed rivals under less favourable tariff regulation.

While waiting for the right window to go public in Hong Kong, Savov said ESE was doing pre-feasibility studies on a natural gas-fired power project with up to 1,200 megawatts of capacity, and two hydro-power plants with a combined capacity of 1,000 MW to 2,400 MW. They are being studied by Yes Energo, a joint venture with Shanghai-listed state-backed China Yangtze Power, the nation’s largest hydropower producer.

Last March, environmental groups including Rivers Without Boundaries, Greenpeace Russia, WWF Russia, and the International Socio-ecological Union, wrote to Hong Kong Exchanges and Clearing calling for the exchange, bankers, and investors, to abstain from participating in ESE’s listing. They said the damming of downstream rivers had caused shore erosion and damaged spawning grounds near Lake Baikal, a Unesco World Heritage site.

Savov said ESE was in discussions with various national and international environmental groups.

«Specific issues need to be addressed because we are in the early stages of feasibility work,» Savov said. «There are variations [in] where exactly we can build the plants.»

He added that ESE could be more specific towards the end of the year when pre-feasibility work would be completed, and said the company’s track record in adhering to local standards was «extremely good».

Greenpeace Russia energy unit head Vladimir Chuprov and Rivers Without Boundaries co-ordinator Eugene Simonov said the groups had not received a response from ESE to their concerns and were not consulted. Simonov said Rivers Without Boundaries’ request to visit ESE’s Irkutsk hydro plant was rejected.

He said the proposal by ESE and China Yangtze to build the fifth hydro-power station on the Angara River would hurt wildlife.

EN+ spokeswoman Elena Rollins, said it was difficult to come to agreement with some environmentalists.

«I haven’t seen any hydro projects that Rivers Without Boundaries approve of. They are just generally against hydro power.»

RwB comment:

Dear Ms.Rollings, we are sorry to admit that we honestly dislike HPP-jumbo river-killers conceived in mid XX century so far owned by EN+. Good reasons for that have been outlined in our special address to investors and HKExchange. 

We always have hoped that ESE\EN+ planning for placement of new power stations  would be a transparent process and environmental and social considerations will be duly and openly incorporated into decision making. So far it has not happen.

Unfortunately new HPPs -Nizhneanagarsky and Tras-Sibirsky proposed by Your company and Chinese partners  are likely to follow the same environmentally-unfriendly pattern as your old dams. We will be very willing to engage into substantive discussion with EN+ on decreasing environmental impacts of existing and new hydro power plants and have expertise in this field. Unfortunately outr letters to Your company sent by us never yielded an answer from your side. Please consider this comment as another invitation to a dialogue on environmental policies and comparative advantages of different dam locations.

Eugene Simonov

International Coordinator 

Rivers without Boundaries

Photo: Shilka  valley to become a bottom of Trans-Sibirskaya reservoir


Mongolian Mining Conundrum — A Glance from Canada

Given  huge stake that Canadian capitalists already have in Mongolian mines an article «Mongolia faces resource ‘curse'» in Vancouver Sun presenting views on Mongolian mining and environmental activists is especially interesting to us.RwB

No one missed the symbolism when the Mongolian government this month announced which companies are getting the rights to develop the western block of the world’s largest known coal reserve, Tavan Tolgoi, in the Gobi Desert.

The Chinese company, Shenhua Energy, won the right to develop 40 per cent of the block. A Russian consortium got 36 per cent, and America’s Peabody Energy won 24 per cent.

Those proportions represent a reasonably accurate picture of how the government in Ulan Bator manages its relationships by both courting and holding at arms-length its two overpowering neighbours, Russia and China, with the help of a long range economic and military alliance with the United States.

But 21 years after Mongolia escaped from the collapsing Soviet Union and achieved renewed independence, the stateowned Tavan Tolgoi deposit, believed to contain 6.5 billion metric tons of metallurgical coal, has even greater significance. Early next year, Erdenes MGL, the state company in charge of developing the remainder of Tavan Tolgoi, will float 29 per cent of the company in international exchanges.

The public offering is expected to raise more than $10 billion. Already, however, 10 per cent of those shares have been distributed to every one of Mongolia’s 2.7 million citizens.

As the government of Prime Minister Sukhbaatar Batbold wrestles with the challenges of developing one of the world’s last known great deposits of mineral wealth, he also must confront the monumental social and cultural pressures involved.

It’s a matter of how a culture and an economy based on the produce and virtues of the life of semi-nomadic herders on Mongolia’s vast plains of open steppe can adapt to take advantage of its mineral deposits, estimated at current values to be worth at least $1 trillion.

These are not easy matters and successive Mongolian governments have struggled to evolve a workable policy toward mineral development while establishing a vigorous democracy, even as a tumultuous rush to grab stakes to the country’s mineral resources is underway. Those governments have been well aware that for underdeveloped countries — 30 per cent of Mongolians still live in poverty — sudden wealth from natural resources can be more a curse than a benefit.

The prime minister has said repeatedly that Norway, Canada and Chile are the examples of resource-based economies he wants Mongolia to follow. Hence the issuing of Tavan Tolgoi shares to Mongolians rather than the failed voucher system in a round of privatizations of state-owned companies when the government adopted free-market reforms after the collapse of the Soviet Union.

But Mongolia is also borrowing from Chile’s experience and establishing a fiscal stabilization fund, which will set aside money for long-term development and tide the country through the inevitable roller-coaster ride in commodity values.

There is also a new Mongolian Development Bank, which will gather mineral revenues to provide loans for infrastructure projects.

A Human Development Fund will use mine revenues to finance education, housing, health care and other social development programs. But not everyone is delighted with the direction Mongolia is taking, even if it does offer a more prosperous future.

There is a loud and sometimes violent anti-mine movement led by an iconic nomadic herder, Tsetsegee Munkhbayer, who heads a group called Fire Nation.

Munkhbayer is in prison after he and followers shot at equipment at a mine in the southern province of Ovorkhangai.

This is not the first time Munkhbayer and his group have used dramatic acts to draw attention to what they say is irresponsible mining operations that they claim are destroying grass land and polluting rivers.

In September, the group riddled a bulldozer with bullet holes at the Boroo gold mine in Selenge province, which is owned by the Toronto-based Canadian company Centerra Gold Inc. And in April, Fire Nation activists charged on horseback into Ulan Bator’s central Sukhbaatar Square.

Munkhbayer began his campaign by leading demands that the Ongi River, one of the country’s largest, be cleaned up after it nearly ran dry because of unchecked mining activities.

Munkhbayer was successful in getting the government to shut down 35 of the 37 mines in the area. As a result, he was awarded in the U.S. in 2007 the Goldman Environmental Prize, which is given to grassroots conservation activists.

By Jonathan Manthorpe, Vancouver Sun July 19, 2011

© Copyright (c) The StarPhoenix

TIME on Sino-Russian energy relationships

«In summer, intolerable closeness; in winter, unendurable cold.»

So Fyodor Dostoevsky wrote of his years of hard labor in 19th century Siberia, after a jittery Tsar Nicholas I banished the famed writer to the lonely Far East. For centuries, the massive swath of land east of Moscow and north of China has been a place of political and cultural exile, but more for its geographic isolation than its lack of provisions. In fact, other exiles in the 1800s made special note that their hosts seemed to have plenty of everything, and by the turn of the century, industrial towns were popping up across the region as tens of thousands of free Russians headed east to take advantage of Siberia’s deep troves of natural resources.

A hundred years later, Beijing is getting in on the action, striking deals to import everything Siberia has on offer — from oil to gas to iron to timber — to help feed China’s growth and appetite for non-coal energy sources.

In 2009, China pushed Germany aside to become Russia’s largest trading partner. Russia and China have already signed a binding (though troubled) agreement that Russia will become China’s largest supplier of natural gas from fields in western and eastern Siberia; in June, the two governments held the latest in a series of ongoing talks over that deal. Despite their failure to reach an agreement on gas pricing, Gazprom CEO Alexei Miller said last month the utility is «completely ready to begin pipeline construction.»

Meanwhile, as of June 1, over six million tons of crude have flowed from Russia to China via the recently completed East Siberia-Pacific Ocean oil pipeline, and plenty of plans to increase Siberian hydropower for Chinese consumption are in the works. Today, a fourth major hydroelectric dam is being completed on Siberia’s Angara River, a 1,105-mile long river that flows out of pristine Lake Baikal, the world’s largest lake. The Boguchanskaya dam is expected to start producing electricity by next spring, and Oleg Deripaska, one of the wealthiest men in Russia and the project’s financer, says that will be part of the 60 billion kWh per year that China has asked Russia to send its way by 2020. In 2009, Russia supplied China with 1 billion kWh.

Beijing’s official line is that its growing interest and investment in Siberia will help an isolated and economically depressed part of the world get back on its feet. Indeed, in 2009, the Far East was the only part of Russia where investment did not shrink, but grew. «I believe that in terms of GDP of Siberian provinces, it could be tripled in the next 15 years,» Deripaska, whose EuroSibEnergo is Russia’s largest private power company and produces 8% of the Russia’s energy, told the BBC. «I can’t see how we can miss this opportunity.»

Many, however, are concerned about the impact these vast projects will have on Siberia’s culture and landscape. Residents of many villages that are in the dams’ floodways have been relocated from their pastoral villages to the region’s bleak, Soviet-era cities, and environmentalists fret about the loss of water from the rivers and the flooding of forests.

Still others worry about the rapid increase in trade and interdependence given the nations’ fraught history, and the ‘takeover’ of Siberia’s wide open spaces by Chinese migrants. Tens of thousands of Chinese workers already live in eastern Siberia, both legally and illegally, willing to work for half the wages of Russian laborers. The  Russian population of the Far East is expected to drop to 4.5 million by 2015. That’s less than a quarter of the population of Beijing alone. As more and more energy deals are signed, Siberia is about to get a lot less lonely.

Krista Mahr is a reporter at TIME

Guardian: Inner Mongolia’s grasslands in crisis

Temperatures and tensions are rising as miners — and tourists — move in to one of China’s most remote and ecologically fragile regions

Chinese riot police were reportedly dragging off protesting herders while I was blithely listening to karaoke on the Inner Mongolian grasslands this week.

I was unaware of the trouble, though I was on a family holiday in the same northern region. This is not entirely surprising given the vastness of an area that covers more than a million square kilometres and the ruthlessness of a censorship regime that blocks websites and locks up individuals for emailing images of protests. But even from the perspective of a holidaymaker, I could see why the changes in the region — particularly to the environment — might spark unrest.

I chose Manzhouli — close to China‘s border with Mongolia (the country) and Russia — for a summer break because its grasslands are supposed to be tranquil, cool, sparsely populated and extremely beautiful. I should have realised, though, it would not turn out as expected.

Instead of a secluded Mongolian camp, we ended up in a complex of concrete yurts with a karaoke machine, firework display and bonfire disco that blasted out techno music across the starlit steppe. I was at first dismayed, then resigned. On the bright side, it was funny in a not-at-all-like-the-brochure sort of way. Not so amusing was the reduction of Mongolia culture to a series of song-and-dance shows and the evident deterioration of the environment.

At this time of year, locals said the grass was usually lush green and knee high. But amid a severe drought, the blades were yellowing and barely reached my ankles. Some areas had already turned to desert and several nearby lakes had dried up so completely that their beds were cracked and white with salt deposits. One herder told me he would soon have to buy fodder — unthinkable in past summers. His concerns appeared unlikely to make ripples; Timber yards and open cast pits suggested the local economy is now dependent on mining and the processing of logs imported from Siberia.

It is a similar story across much of Inner Mongolia. In recent years, the region has become China’s leading producer of coal and rare earths as well as the doorway to Russia (and the biggest timber trade in the world). This has attracted an influx of Han businessmen. Meanwhile, the traditional nomadic lifestyle has come under multiple assault from open-cast mining, over-grazing, enclosed farming, migration and global warming.

Many Mongolians — who make up only a fifth of the population in their homeland — are unhappy about these trends. Last month, I covered
the wave of protests sparked by the killing of a Mongolian herder by a Han truck driver. This week, police are said to have beaten up and detained ethnic Mongolians who demonstrated against a lead mine in Bayannuur. According to the New York-based Southern Mongolian Human Rights Information Centre, the protesters shut down the mine’s water pump when it expanded on to their grazing lands. Local police and the mine’s owners, however, told The Guardian «nothing happened».

The authorities might deny the social impact, but something is definitely happening to the environment in Inner Mongolia, just as it is happening in Tibet and Xinjiang. An indigenous population is being squeezed out by a more powerful ethnic group that wants to exploit the region’s resources. It is an old story, similar to that seen in the US, Australia, New Zealand and many other parts of the world over the past few centuries, but with the added complications of climate change and globalisation.

Earlier this week, Radio Free Asia reported that a protest song has been written by a Mongolian rapper. Downloadable here, the lyrics make a direct connection between environmental abuse and social unrest:

«We have grazed animals here thousands of years…How many people are coming here to open mines and plunder our resources…Our home is being devastated..The green grasslands are turning yellow.»

I have not been able to verify how popular this rap has become in Inner Mongolia, but it is unlikely to ever appear on a karaoke machine here.


Jonathan Watts


AFP praises Mukhbayar

By Michael Kohn | AFP – Wed, Jul 6, 2011

Mongolia herder on mission to tackle mining firms

 The destruction of Mongolia’s grasslands to access a wealth of mineral riches has sparked an anti-mining movement led by a nomadic herder who says force can be used to bring polluting firms to heel.

Tsetsegee Munkhbayar is the head of Fire Nation, a small group on a crusade to put an end to what they say are irresponsible mining operations in the resource-rich landlocked country that are threatening their livelihoods.

After failing to gain traction with the country’s political leaders, Munkhbayar and his fellow activists reportedly took matters into their own hands and shot at equipment at a mine in the southern province of Ovorkhangai.

Now Munkhbayar — who in 2007 gained national fame by winning the US-based Goldman Environmental Prize honouring grassroots activists for his work in cleaning up the Ongi river, one of the largest in the country — is in jail.

«We will give the mining companies fair warning — either they must cease their activities or incur our wrath,» Munkhbayar, 44, told reporters shortly before he was detained late last month in connection with the mine incident.

«If they do not comply with our demands, then we will use our guns. We are not violent people but we will do what we need to do to stop these environmental polluters.»

Munkhbayar’s quest for justice began with his work on the Ongi river. It had run nearly dry due to unchecked mining activity as both local and foreign companies look to cash in on the country’s mineral treasure trove.

He won the Goldman Prize after lobbying to shut down 35 of the 37 mines in the area, and has since used the $125,000 that came along with it to increase public awareness about environmental issues.

But he and his ragtag band of activist herders are finding it hard to keep up with the dizzying pace at which private mines are opening up — and are finding their cause largely ignored in Mongolia’s halls of officialdom.

In April, they charged onto the main Sukhbaatar Square in the capital Ulan Bator on horseback, calling for the government to clean up the mining sector and take more responsibility for environmental degradation.

«We wanted to speak to the president, to tell him that if he cannot do his job properly, then he should step down,» Munkhbayar told AFP.

When top leaders spurned their requests for a meeting, the protesters responded Genghis Khan-style — by shooting arrows at Government House. And then came the incident at the mine in Ovorkhangai province.

No one was injured and there was minimal damage to the equipment, but Munkhbayar is in police custody in Ulan Bator. Local media say he can be detained without charge for up to 30 days, until about July 24.

It was not the first time that Munkhbayar had resorted to violence.

In September last year, he and three other activists shot up a bulldozer at the Canadian-run Boroo gold mine in Selenge province, after the mining company refused to cease operations that he said were polluting local streams.

In China’s Inner Mongolia region to the south, ethnic Mongol herders are similarly angry at what they say is rampant mining, and in May staged several days of protests over resource exploitation by powerful mining interests.

The confrontations highlight the rift between Mongolia?s traditional way of life and new economic realities in the impoverished country.

Mongolia is setting itself up to be a global name in the mining industry, thanks mostly to its vast reserves of gold, silver, coal, iron ore, uranium and oil — and the voracious appetite for resources in neighboring China.

Plans are being laid for a vast network of paved highways, rail lines, power stations and other infrastructure that will forever change the landscape of this sparsely populated nation of 2.7 million inhabitants.

Herders are already feeling the effects of the economic boom.

Many have lost their pastures and moved to Ulan Bator, where they have joined an army of urban poor in the shantytowns circling the capital.

Others have turned to «ninja mining» — panning for gold in the tailings left behind by bigger mining companies. Small numbers have joined Munkhbayar in his campaign to fight the mining companies.

«They are not afraid to protest,» Kirk Olson, a US biologist and environmentalist working on a World Bank-sponsored project in Mongolia, told AFP.

«They are starting to realise that all this unchecked mining is impacting their livelihoods and they are standing up and saying ‘enough is enough’.»

Olson says that in many parts of Mongolia, mining companies have drained water resources, destroying grasslands and depriving herders of their livelihoods. He said more cooperation was needed to end the problem.

The government has attempted to slow the destruction.

Last year, it enacted a law banning mining operations near rivers and forests and suspended more than 1,700 mining licenses in these areas. But activists like Munkhbayar have said the law is not being enforced.

Some politicians have proposed setting up a fund financed in part by the mines themselves to help rehabilitate spoiled land.

«Someone has to take responsibility for all this damage and if the mining companies have not done it, then the state has to step up,» lawmaker Sanjasurengiin Oyun, a geologist by education, told AFP.

Until then, activists like Munkhbayar are facing an uphill battle.

«We are a small group of simple herders fighting powerful people,» said Munkhbayar.

«It’s not an easy fight but we cannot stand by idly and watch our land and way of life come to an end.»

Guardian’s insights into UB build-up

In June The Guardian published an article «Driven from the land» by Kit Gillet attepmting to explain how come that the capital already holds from 55 to 70% of national population.

As desertification and bitter winters increasingly destroy the livelihoods of Mongolia‘s herders, hundreds of thousands are moving into Ulan Bator‘s shantytowns from the dry, desolate countryside. Kit Gillet reports.

It is a supreme irony in a country once known as the land without fences. Stretching north from the capital, Ulan Bator, an endless succession of dilapidated boundary markers criss-cross away into the distance. They demarcate a vast shantytown that sprawls for kilometres and is now estimated to be home to a quarter of the entire population of Mongolia.

More than 700,000 people have crowded into the area in the past two decades. Many are ex-herders and their families whose livelihoods have been destroyed by bitter winters that can last more than half the year; many more are victims of desertification caused by global warming and overgrazing; the United Nations Development Programme estimates that up to 90% of the country is now fragile dryland.

Yet with limited education, few transferable job skills and often no official documents, most inhabitants end up simply waiting, getting angry with the government and reminiscing about nomadic lives past. Many take to alcohol.

«More and more people arrive every year and there are so few jobs available,» said Davaasambuu after queuing for 30 minutes to collect his family’s daily drinking water from one of 500 water stations that dot the slum. «Nothing has changed in my neighbourhood since the last election [in May 2009]. There have been no new jobs or improvements. One little bridge has been added in the last four years — that’s it.»

The basic infrastructure is not in place to support such a large population, which expands by tens of thousands of people a year. Many of them still live in a gerthe traditional round, felt tent they arrived with from the countryside and which gives the districts their name and also their sense of impermanence.

Davaasambuu’s is not an easy life. The area around his home is falling into disrepair, with rubbish piling high. Nightly fights between drunks are getting worse. But at least he can take comfort in the fact that he now has a job with which to support his family, unlike many of his neighbours.

«Not everyone in the ger district is dirt poor — some are doing OK — but it is a hard life,» said Troy Tvrdik, whose educational- and vocational-training NGO, Flourishing Future, is based in the district. «Even when it is minus 40°, you still have to go out to get water.»

A World Bank report published last year highlighted the plight of ger district residents, most of whom have limited access to electricity and no running water, sewage or central heating. The report found that during the long winter, when temperatures plummet to below freezing for up to eight months, poorer residents are forced to spend up to 40% of their income on wood or coal for heating, which adds to their financial burden as well as to the heavy clouds of pollution that hang over the city.

Roads are simple, unpaved mud paths and streets have no signs, lights or even names, but are merely the gaps between rows of tents or shacks set up by newly arrived migrants, without any input from the government.

«The quality of the infrastructure is a major problem,» said Mesky Brhane, a senior urban specialist with the World Bank, who helped produce last year’s report. «[People] are clearly frustrated by the lack of infrastructural improvements by the government.»

Protesters, many from the ger districts, have repeatedly descended on the parliament over the past few years, including a large protest in April, demanding a better distribution of the country’s mining wealth. Despite the money pouring into the country from the mining of natural resources, little makes its way to the residents of the shantytown. Mongolia has a population of just 2.7 million yet has the world’s largest mining-exploration project and, in Tavan Tolgoi, the world’s second-largest coal deposit.

Even in the more central ger areas, where many residents have lived for over a decade and built more permanent wooden or brick houses, running water and central heating are unavailable and the streets remain dark, mud roads with open sewage streams and rubbish piled high.

Another big concern is the level of unemployment. While tens of thousands of rural migrants flood the city every year looking for work, setting up their tents at the point where last year’s migrants stopped, unemployment remains a critical issue, especially in the ger districts where the unemployment rate can be as high as 62%, compared with 21% in the more developed areas of the capital.

The Mongolian government has officially declared 2011 «employment support year» in an effort to create 70,000 new jobs, but so far few signs of improvement have been visible.

«One of the biggest problems is that there is very little economic activity within the ger districts due to inadequate infrastructure — everyone has to leave the area to work,» said Brhane. «One new project the World Bank is working on is looking at ways to generate local economic development so people can live and work there. It would make a tremendous difference to people’s lives.»

«We have 12 people in our family and only two have work,» said Dashkhord, aged 50. She and her family moved from the countryside five years ago after one harsh winter took away their entire herd of 100 animals. They arrived with next to nothing and simply pitched their tent on the outskirts of the sprawling shantytown.

«The first year was really difficult,» she said. «It took me over a year to find my first job — cleaning at a hotel. I spent the first few months simply collecting plastic bottles to sell.»

Today Dashkhord earns the equivalent of about US$100 a month as a cleaner at a supermarket, a far cry from her pastoral background, while her eldest daughter looks after children for a wealthier family.

«My other daughter is also looking for a job helping look after kids,» she said. «But it is hard since there are so few jobs and they are so far away. Also, all the job adverts now say you must be over 1.7 metres, beautiful and well educated.»

«For me, I wish we stayed in the village, but for my daughter and grandkids it is better here,» said Baasankhuu, aged 63, who moved to a ger district three years ago and whose roughly US$65-a-month pension is barely enough for her and her family to live on. «My grandchildren can get a better education in Ulan Bator and maybe have a chance at a real job and future.»