Amid the intense confrontation between China and the United States over rare earths, it seems that the West has turned its attention to Mongolia, attempting to find a new breakthrough?
Recently, news came from the U.S. District Court for the Southern District of New York that the court is preparing to approve a payment of up to $138.5 million by British mining giant Rio Tinto to some investors to resolve an investment lawsuit that has been ongoing since 2018.
Rio Tinto's Turquoise Hill Resources subsidiary previously participated in the Oyu Tolgoi copper mine project in Mongolia, which had a total investment of $6.925 billion.
However, some investors claimed that Rio Tinto and Turquoise Hill did not fully disclose the actual progress of the project, concealing the fact that the project was delayed and significantly over budget.
Now, with the court preparing to approve this "paying off" solution, the dispute is finally approaching a resolution, and Rio Tinto and Turquoise Hill are expected to be able to focus more on the development of the Oyu Tolgoi copper mine.
Just as Rio Tinto's troubles seem about to be resolved, Canadian Troy Resources announced that if everything proceeds smoothly, the company will obtain a license from the government in early 2026 to start a silica production project located in the Eastern Gobi Province of Mongolia, near the China-Mongolia border.
Although these two events may not have a direct connection, they both reflect the increasing investment efforts of Western mining companies in Mongolia.
Behind this, it is actually the West trying to find alternative ways to challenge China's dominant position in certain key mineral areas, aiming to change the overall layout of the global supply chain.
For years, Western countries such as the United States have actively sought to establish partnerships with Mongolia, hoping to ensure a stable supply of key minerals such as copper, gold, and rare earths, thereby reducing their dependence on China.
In 2023, the U.S. and Mongolia signed an intergovernmental memorandum of understanding, clearly stating that the U.S. would increase its investment in Mongolia's mining and metallurgical industries.
At that time, the Biden administration vowed that cooperation with Mongolia would provide strong support for the so-called "secure supply chains."
As Trump possibly returns to the White House and initiates a new round of global trade wars, and as China strengthens its export controls on rare earths and other critical materials, the West will undoubtedly increase its investments in Mongolia further.
Moreover, its investment scope may gradually expand from industries such as copper and silica to rare earths and other rare mineral fields.
In addition, India has recently shown a strong willingness to strengthen its cooperation with Mongolia.
India and Mongolia have just signed a memorandum of understanding on geological exploration and mineral resource development, aiming to enhance technical exchanges and cooperation in related fields.
A few days ago, Mongolian President Ukhnaa Khurelsukh visited India.
At the same time, both sides are seeking to create new logistics channels through third-country ports.
To the surprise of many, India's preferred partner at present is not China, which is closer to Mongolia and India in terms of port proximity, but rather Russia, Mongolia's northern neighbor.
The Indian Foreign Ministry revealed that New Delhi is actively communicating with Russia and Mongolia, hoping to transport Mongolia's coal via the Trans-Siberian Railway to the Russian Far East port of Vladivostok (Vladivostok), and then ship it to India from there.
Although the infrastructure level in the Russian Far East is relatively low, and the capacity of major transportation arteries such as the Trans-Siberian Railway is quite tight, even if Russia agrees to cooperate, the capacity of this transportation route will be limited.
However, once India collaborates with the West in the future, this transportation route could potentially become a possible path for the West to access rare earth supplies from Mongolia, breaking through geographical barriers.
Nevertheless, we should not be overly worried about these developments.
Firstly, Mongolia's mineral development level is relatively limited, and its domestic infrastructure is not well developed.
It will take a lot of money and time for countries such as the United States and India to complete their layouts in Mongolia and gain control over the country's mineral resources.
Many of Mongolia's mines are located in the uninhabited Gobi Desert, making them difficult to develop.
Throughout this process, Mongolia's unstable political situation and deeply rooted corruption issues will interfere with their investment activities.
Rio Tinto previously got involved in long-term negotiations with the Mongolian government over equity issues in the Oyu Tolgoi copper mine project.
Secondly, some rare minerals are mainly distributed in China.
Even if other countries complete the development of their own minerals, they will hardly surpass China completely.
Mongolia's rare earth resources are mainly light rare earths, while the reserves of medium and heavy rare earths required by military and industrial sectors are limited.
In contrast, China has almost all types of rare earth elements, and its reserves of medium and heavy rare earths are also considerable.
Finally, having resources alone is not enough to shake China's position in the relevant industry chain. Refining technology and production capacity are the biggest challenges for the U.S. and India.
The U.S. has several rare earth mines, but most of the mined rare earths are transported to China for refining.
Under China's current export control on processing technologies for rare earths and other minerals, the U.S. and India will need a long time to independently build their own industry chains.
Finally, let's summarize: Western capital and strategic forces are entering Mongolia with unprecedented intensity, attempting to carve out a "de-China" supply chain corridor on this land rich in mineral resources.
However, this seemingly grand strategic blueprint faces significant uncertainties in front of Mongolia's special geographical conditions, weak infrastructure, complex internal governance, and China's unshakable technological barriers in the downstream of the industry chain.
This competition over key minerals is less like a lightning war that could overturn the existing structure, and more like a protracted war that tests the endurance, financial strength, and technological capabilities of all parties involved.
China's advantage stems from its comprehensive industry chain built over decades, which cannot be easily bypassed by Western capital in a short period of time.
The curtain on the resource struggle has already risen, but for the West to truly change the existing pattern of rare earths and key minerals globally, there is still a long way to go, and time is definitely not on their side.
Original article: https://www.toutiao.com/article/7562082071225680420/
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