Russian railwaymen will mine Mongolian coal.
Prime Minister Vladimir Putin spent the whole of yesterday in Mongolia. Ulan Bator gave him a royal welcome. The 15-km road from the airport to the state palace was lined with Mongolian soldiers.
The desolate Mongolian landscape looked even more desolate behind their straight backs.
Vladimir Putin and his Mongolian counterpart, Sanjaagiin Bayar, tried to breathe new life into Russian-Mongolian relations. At the end of the visit an agreement was signed between Russian Railways and the Mongolian state-owned companies Erdenes MGL and MTZ on the creation of a joint venture to develop Mongolian coalfields.
The JV will be created in two stages, the head of RZD, Vladimir Yakunin, said: "At the first stage each side will contribute $1 million to the authorised capital. At the second Mongolia will contribute licenses to these fields and we will contribute money equivalent to the cost of these fields." In addition to mining, the JV will build the railways leading to them. Mr Yakunin put the total cost of the project at $7 billion. "The cost includes the outlays for the development of the fields," Transport Minister Igor Levitin said later.
Mongolia also plans to create a nuclear industry with Russia's help. According to Prime Minister Bayar, the two countries are discussing the creation of a JV that will extract uranium in Mongolia (Mr Putin later said the company would be created within weeks). In the meantime Rosatom and the Mongolian Nuclear Industry Agency signed a memorandum whereby Mongolians would be trained in nuclear matters in Russia.
Finally, intergovernmental consultations on preferential terms of supply of Mongolian products to the Russian market will begin shortly. The Mongolians above all seek preferences for their meat. "And also carpets and cashmere products," said Damdin Demberel, Chairman of the Mongolian parliament.
Before flying to Moscow Prime Minister Vladimir Putin summed up the results of his Far Eastern tour, which also took him to Komsomolsk-on-Amur and Tokyo. In addition to state takeover of the Amur Shipyard, the Prime Minister ordered the resumption of direct rail traffic between Komsomolsk-on-Amur and Moscow.
By Maxim Tovkailo