Large-scale mining has brought unprecedented economic growth to Mongolia. Oyu Tolgoi, or “Turquoise Hill” is an isolated place in the Gobi desert and the site of the biggest foreign-investment project in Mongolia, a copper and gold mine. By 2020, this project alone is expected to account for one-third of Mongolia's GDP. In addition to this copper and gold mine, Mongolia has substantial, proven reserves of coal.
China is the world’s biggest emitter of carbon dioxide, and 70 percent of its energy is based on coal. The combination of Mongolian supply and Chinese demand can make Mongolia rich beyond the wildest dreams of a population, who has always been composed by nomadic herders. With just under 3m people, this country has a chance of becoming a Qatar or a Brunei. Mongolian coal production is expected to increase from approximately 16m tonnes a year now to 40m by 2020 and to 240m by 2040.
China provides a ready market, but Mongolians are fearful of a Chinese takeover by commercial stealth. For this reason, feasibility studies are being done on the costly options of building railways to take coal to Korea and Japan via Vladivostok, Russia, or to South Korea via Dandong on the Chinese-North Korean border.