Commentary and analysis on markets, personal finance, and wealth building from a contrarian perspective. "I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting there and trying to dream it up all yourself. Nobody’s that smart."
— Charlie Munger
Rio Tinto will push ahead with a $US5.3 billion expansion of
its Oyu Tolgoi copper and gold mine in Mongolia, with the project set to
cost about $US400 million more than previously thought.
Ending a three-year stalemate, the approval was agreed by
Rio, its Canadian subsidiary Turquoise Hill Resources and the Mongolian
Development will begin within months, and first production
from the underground expansion will come in 2020, when a shortage of copper is
tipped to emerge.
Oyu Tolgoi mine in southern Mongolia
All I can say is Finally. Mongolia really needs this mine and the billions in investment that it will bring to the economy. Back in 2011 the Mongolian economy was growing at 17% per year. The slowdown in China and the resultant prolonged decline in commodity prices along with several own goals by Mongolia's government have conspired to slow the economy to a projected growth rate of .8% for 2016.
Nevertheless now that this $5.3 billion dollar expansion is going to progress we should see the economy benefit. This will be good for long suffering shareholders of Mongolia Growth Group of which I am one. I believe totally in the Mongolian story which I have written about before.
Looks like the shares have bottomed
The shares are totally bombed out but they represent a long term call on the Mongolian economy. In addition, the shares are only selling for $.33 yet have over a $1.00 per share worth of prime real estate in the capital of Ulaanbaatar. If you think the economy is going to grow than a rebound in real estate is inevitable.