Merkel will visit Ulan Bator during her trip to Asia from the 10th to the 13th of October. Germany seeks to sign a deal on rare-earth elements that would assure them access to the so-called ‘oil’ of the 21st century, at a good price. In return, Mongolia will benefit with investments towards infrastructure and clean energy from German companies.
Rare-earth metals are the key components of new technologies; China, as the largest producer of rare earth elements, has recently cut its exports to the world. Such a reduction in exportations has meant that Germany is now looking for other sources and is therefore willing to come to an agreement with the Mongolian authorities so that Europe will not be as dependant on China’s exportations in the future.
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Mongolia is a landlocked country, sharing its borders with two global giants: China and Russia. However, that has not stopped it from being an important ally for western powers sending troops to Afghanistan and Iraq, as well as being an example of democracy in Asia. Mongolia certainly has an active ‘third neighbour policy’. Germany will visit Mongolia for the first time since the two countries established diplomatic relations after being invited by the Mongolian Prime minister.
Negotiations are expected to go well between the two countries, especially after Bat Khurt’s, the head of Mongolia’s National Security Council, unexpected release from a German prison only three weeks before his trial.
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Source: Stefan, Nicola. "Merkel Aims to Sign Rare Earths Deal With Mongolia Next Week."
October 6, 2011. Bloomberg
http://www.bloomberg.com/news/2011-10-07/merkel-aims-to-sign-rare-earth-deal-with-mongols-official-says.html
*For those of you who wish to know more about Bat Khurt, here’s an article from The Economist.
http://www.economist.com/blogs/banyan/2011/09/murky-mongolian-saga
I believe such an agreement would be very positive for both Germany and Mongolia, as long as the conditions are reasonable for both parts. The fact that Mongolia is rich in those rare-earth minerals is a great opportunity for the country to become more prosperous. As you mentioned, they are and will continue to be a key factor in international relations. The problem now is who will actually benefit from the exploitation of those natural resources. Mongolia faces deep-rooted social problems, as its people struggle between leading a nomadic life and earning a living in the vast shantytowns that surround Ulan Bator.
ReplyDeleteAs for the release of Bat Khurt… I wonder what are the real reasons behind it.