Mongolia's Long Road To Mining Wealth

Jul 31, 2019
Originally published on August 1, 2019 8:46 am

Gulnara Dariiga has been stuck in traffic for two days in the Gobi Desert in southern Mongolia. The 38-year-old mother of four eats and sleeps in a heavy-duty North Benz truck, assigned to her by her Chinese employer — a coal buyer across the border.

"I think today we will cross," she says with a grin. She shifts from park to drive, clenching her teeth to fight the stiff steering wheel. Her truck is laden with 90 tons of coal from Mongolia's Tavan Tolgoi mine, ready for delivery.

This trade road and the immense gridlock of hissing trucks lined up like dominoes, waiting to cross the Mongolia-China border, are an indication of Mongolia's future: The nation is shifting away from an economy based on agriculture and herding to one based on mining. With economic transformation comes opportunity, but also environmental damage and growing pains for local residents, as the landscape is carved up by mining machinery and trucks.

The road from Mongolia's Tavan Tolgoi coal mine to the border crossing at Gashuun Sukhait is 150 miles long. Backups can stretch for miles. Drivers may wait up to seven days in this line before reaching China.
Claire Harbage / NPR

This is not the Mongolia that Gulnara grew up in. Born in Selenge, a heavily forested province in the east, she worked on a vegetable and wheat farm.

"Selenge is beautiful, with a nice river and berries. The problem is there's no jobs there for young people," Gulnara says.

Mongolians are migrating away from rural areas, seeking work elsewhere. And one of the places they're going is Ömnögovi, a mineral-rich province in the South Gobi, home to the mega-mining projects Tavan Tolgoi (coal) and the Oyu Tolgoi (gold, copper and silver). Two decades ago, Ömnögovi was the least populated province in Mongolia. Now, it's a destination for those seeking formal and off-the-books work.

Drivers take a cigarette break while waiting for the line of coal trucks to budge. Many share traffic information over social media apps.
Claire Harbage / NPR

Roads — some paved, some rutted by tires — are appearing in places they never were before. Drivers, mechanics, retailers and other business owners are setting up shop. There's money to be made on the way to the border. But driving along the roads, some more than a decade old now, the scars become apparent.

"Like lines on a human palm"

Landlocked between Russia and China, Mongolia sends its exports overland by railway and truck. The Mongolian government pledged to build a separate railway from the Tavan Tolgoi coal mine by 2021 to expedite coal deliveries to China through the South Gobi corridor, but has failed to secure financing.

Trucks churn up coal dust at the Tavan Tolgoi coal mine in the South Gobi desert. The Tavan Tolgoi deposit is estimated to possess 6.5 billion tons of coal, including high-grade coking coal — a product vital to the steel-making process.
Claire Harbage / NPR

The coal trade depends on trucks like Gulnara's, and on a network of roads leading directly from the mines. Prior to this job, she rode shotgun alongside her husband. "I can do this too," she thought, and secured her own truck last December. She outfitted the North Benz with a gas stove and stretched a clothes line across the sleeper cab. She applies makeup with the aid of her rearview mirror, eyebrows perfectly drawn.

Gulnara Dariiga, 38, stands in front of her truck, a North Benz assigned to her by her Chinese employer. She performs a tea ritual in the morning, praying drivers stay safe on the road.
Claire Harbage / NPR

Gulnara will be paid 1,800 Chinese yuan ($260) for delivering this load of coal. She completes two trips a month minimum, generating a monthly income of $520, more than double Mongolia's median monthly wage of $250, according to the National Office of Statistics.

She's proud of this. All her children are enrolled in school. The money she and her husband make pays for their education.

On the way to a paycheck, however, are dangerous, exhausting road conditions. Entry to China is slow, as vehicles carrying people and goods converge on a single point.

The line of thousands of trucks to the border crossing between Gashuun Sukhait, Mongolia, and Gants Mod, China, regularly spans 15 miles and drivers know it can take days of waiting.

Gulnara has waited up to seven days to cross. Men smoke cigarettes outside their trucks in small clusters. Their vehicles are outfitted with string lights on the grille and pictures from home on the dashboard.

She watches movies to pass the time and scrolls through photos of Selenge on her phone. Her kids are still there, taken care of by their grandmother, and she calls them daily. The few other women doing this trucking work wave to her as they pass.

Don't see the graphic above? Click here.

Every morning, she prepares suutei tsai, traditional milk tea with salt. She tosses the pearly drink into the sky as an offering to the spirits of the land, deities of shamanic ancestry. She prays that no driver will be harmed during the journey.

To jump the line, trucks often weave into the contraflow lane. Collisions are common. Twisted metal from flaming car wrecks and shards of pavement line the road. "You have to be alert all the time," Gulnara cautions. "You have to look at the passing truck."

Otgonduu Khuudeg, 51, stands outside his home in the South Gobi. The herder has watched the pastureland change as the mining industry has grown. Six of his camels were killed by passing trucks.
Claire Harbage / NPR

Otgonduu Khuudeg, 51, remembers the arrival of cross-border trade between Tavan Tolgoi and China in 2011. The usual quiet of the region's pastureland was disrupted by the rumble of cars on an unpaved road. Trucks kicked up fragile topsoil, churning clouds of dust in their wake. Some in the area mounted protests, smashing truck windows and reporting drivers to local authorities.

"The Gobi road became like lines on a human palm. Trucks were hitting groups of animals," he says. He lost half a dozen camels to vehicles accidentally colliding with his herd.

NewsAgency Mongolia estimates there are about 12,000 coal truck drivers ferrying product from Erdenes Tavan-Tolgoi, Energy Resources LLC, and other enterprises that tap the massive Tavan Tolgoi coal deposit. It also reports 51 truck drivers were killed along the road from Tavan Tolgoi to the border between 2015 and 2018.

The road is largely unregulated, with little police presence. Traffic rises and falls in lockstep with China's demand for coal.

"Vulnerable and volatile"

Before the road, there was open rangeland.

For nearly seven decades in the 20thcentury, Mongolia was a Soviet satellite with a centrally planned economy. Agriculture was the economy's centerpiece. Industrial mining did exist, but it was not until the 1990s — with the transition to free-market democracy — that foreign investors could get involved.

Horses graze in pastureland just outside one of Tavan Tolgoi's open-pit mines, where coal is being extracted for export.
Claire Harbage / NPR

Mining boomed. By 2011, Mongolia had the fastest-growing economy in the world, earning the nickname Minegolia.

While mining ushered in new wealth, it has also opened the door to economic volatility. The government spent beyond its means and when commodity prices dropped, it couldn't repay its loans. The national debt reached untenable levels. In 2017, the International Monetary Fund approved a $5.5 billion bailout package.

Approximately 1,100 vehicles cross the Mongolia-China border daily. These trucks carry copper concentrate from Oyu Tolgoi, packed in white bags and covered with a green tarp.
Claire Harbage / NPR

Mineral prices have since picked up, and economic growth resumed. But with one boom, in 2011, and bust, in 2016, already under its belt, where does that leave Mongolia today?

"Vulnerable and volatile to commodity prices," says Dorjdari Namkhaijantsan, 45, the country manager of the Natural Resource Governance Institute, a policy nonprofit. "Ninety percent of Mongolian exports are depending on one sector [mining]. That's a risk. And we have to manage it."

While Mongolia's mineral wealth is massive — valued between $1 trillion and $3 trillion in coal, copper and gold — it won't last forever. "If we end up exploiting all our natural resources and still have huge poverty in Mongolia, then obviously we will have lost the opportunity," says Dorjdari.

Oyu Tolgoi is 34% owned by the government of Mongolia and 66% by Turquoise Hill Resource, a Canadian company backed by mining multinational Rio Tinto. The project has been hampered by construction delays and political squabbles.
Emily Kwong / NPR

Mining also comes at tremendous cost to the environment. The greatest tension in the region revolves around water. Climate change impacts — like drought and desertification — have already dried up hundreds of Mongolia's rivers and lakes. Residents worry about how mining, which requires huge amounts of water for processing, could degrade the land even further.

This is especially true for those neighboring the massive mining project at Oyu Tolgoi. Discovered in 2001, Oyu Tolgoi contains among the largest deposits of copper and gold in the world, according to Rio Tinto. It is Mongolia's biggest mining project.

Oyu Tolgoi's cafeteria is named after the endangered Gobi brown bear. Over 95% of the 2,500-member workforce is Mongolian.
Emily Kwong / NPR

Chartered flights arrive and depart daily from all over the country, as workers arrive for their rotations. With approximately 2,500 employees, the mining project has a hair salon, a movie theater and a cafeteria named after the endangered Gobi brown bear, known as Mazaalai.

Oyu Tolgoi's road to the border is different from the one from Tavan Tolgoi — it's approximately 60 miles of well-maintained concrete. Trucks bearing copper concentrate drive several lengths apart. Seatbelts are mandatory for all employees.

But even this industry leader has come under environmental scrutiny. During construction in 2011, contractors diverted the Undai River. Herding groups in Khanbogd filed a complaint with the compliance adviser ombudsman of the World Bank, claiming that decision dried up local water wells and threatened their herders' livelihood. The parties came to an agreement in March on environmental management and compensation, but tensions persist.

Otgonduu Khuudeg, 51, and his wife, Tsedendil Dedkhuu, 60, move cows around to better situate them for the morning milking. The veteran camel herders were displaced by the construction of the Oyu Tolgoi mine. Otgonduu purchased a bull with the displacement compensation he received.
Claire Harbage / NPR

Otgunduu, the herder who lost camels to passing trucks, lived in the path of the construction site. He and his wife were 11 families physically displaced in 2004. Another 89 herding families were "economically displaced," compensated for damages to their livelihood.

While most of his peers have given up herding as mining encroaches on the land, the displacement payment he received from Oyu Tolgoi allowed him to purchase a male cow and continue herding. The company has expressed interest in buying his beef one day to feed miners in the cafeteria and elsewhere.

Otgonduu's cows, wrapped in blankets, walk in front of a water storage container on his property. Cows are not naturally suited for the semiarid conditions of the Gobi Desert, but Otgonduu feels he has no choice but to try herding them.
Claire Harbage / NPR

Cows are not naturally suited to the semiarid conditions of the Gobi Desert, but Otgonduu feels like he has no other choice. "We are already old, and no one will hire us. We can't do other jobs. This is what we know how to do," he says. "We have to adapt to the changing environment and the key for that is water."

For its part, Oyu Tologi is making an effort to protect water for the local community. Erdenebayar Naran, the company's 37-year-old environmental manager, monitors the levels of local water wells and oversees a water diversion project, designed to direct water from a natural riverbed away from future construction.

"If we don't divert water to go around the open-pit [mine]. that subsurface water will be lost," he says. "All the herder wells and natural springs and wildlife will not have any drinking water source."

Erdenebayar picks up trash as he walks the perimeter of the new water spring. As someone who grew up in the South Gobi, the work for him is personal. He is fully aware that Oyu Tolgoi's mineral wealth is finite, slated to last 150 years at best, and wants the process to unfold in an environmentally sustainable way.

"My ancestors lived here," he says. "My generation's offspring will see me. I don't want them saying, 'My father did a terrible job and destroyed this land.'"

But when asked if he feels conflicted working for the mining industry, he says no. "We need economic growth. We don't have technology. We have resources. And we have the Chinese market right next to us. In Mongolia, the only way to make money fast is through the mining industry."

Batdelger Genden, 53, at her recently opened restaurant in Tsagaan Khad. She calls this region "Mongolia's Korea," saying, "This is like the promised land for the Mongolian unemployed, for those who want to make money for honest work."
Claire Harbage / NPR

"We are Mongolia's Korea"

About 15 miles north of the Chinese border is the community of Tsagaan Khad — which means White Rock. The unplanned settlement did not exist 30 years ago. It bloomed in the South Gobi as the road network grew, a gathering of service providers catering to drivers and passerby.

While the mining industry directly employs just 3.6% of Mongolians, the industry's growth has meant many others can find informal employment, responding to needs of industry in the region.

In 1993, Tsagaan Khad was a temporary camp of 10 gers. Now it is a sprawling community of as many as 10,000 people either staying there or passing through at any given time. Drivers can stop over in the area to get a hot meal, a quick rest and play a game of cards before embarking on the 15-mile journey to the border.
Claire Harbage / NPR

Batdelger Genden, 53, presides like a mother hen in Tsagaan Khad. On a cool evening in late February, she raises a glass of vodka on the opening night of her new restaurant, which she's named "Traveler."

A customer enjoys a cup of hot milk tea at Batdelger Genden's restaurant in Tsagaan Khad.
Claire Harbage / NPR

The tables are heaped with candy and soda, while a professional chef hired from Ulaanbaatar, Mongolia's capital, prepares a mutton dumpling soup. The playlist is heavily Dolly Parton and Kenny Rogers.

Batdelger commands the room full of friends and customers with a speech: "May your lives prosper. There are many drivers passing through this road. Here is a place where you can stop and eat good food and have a leisurely time."

Her patrons cheer.

Tsagaan Khad began as a temporary camp of 10 homes in 1993. Now, it is a sprawling community of 10,000 people either staying there or passing through at any given time. Mining has that much pull in the region, creating opportunity where none existed before, in a country where 30% of the population lives in poverty.

The Happy Mini market is located in the center of Tsagaan Khad. The town bloomed in the South Gobi as the road network grew, a gathering of service providers catering to drivers and passerby.
Claire Harbage / NPR

In Tsagaan Khad, auto mechanics rub elbows with food purveyors. Dust storms are frequent, driving people indoors. Drivers can get a hot meal, a quick rest, and play a game of cards before embarking on the 15-mile journey to the border.

Batdelger isn't bothered by the dust storms, as long as they don't disrupt her business. She's sympathetic to those trying to make a living in the South Gobi, profiting from what mining has to offer in any way they know how. She calls it "Mongolia's Korea."

"This is like the promised land for the Mongolian unemployed, for those who want to make money for honest work," she says. "Freedom is here."

Mining is not anticipated to slow down, as mineral products and precious metals account for 23% of Mongolia's overall GDP. To take part in the global economy and lift Mongolians out of poverty, the nation is leaning into its mineral wealth. But Mongolia is also warming. Mining directly contributes to climate change. The land is growing increasingly fragile.

How do these two realities square?

As Dorjdari, who tracks the country's mining and government, put it: "When your stomach is empty, you don't think about the environment."

Many NPR spoke with feared the country's new direction in the long term. Tomorchuluun Tavkhai, a 69-year-old herder in the Gobi, said, "Mongolia is like a small island in a blue planet. If we help preserve the environment, I think it will be helpful for the rest of the world."


This is part of a series by Emily Kwong (@emilykwong1234), who spent nine weeks reporting in Mongolia as NPR's Above the Fray fellow. Additional reporting and translations were provided by Ganbat Namjilsangarav and Enkhbat Doorov. The fellowship is sponsored by the John Alexander Project, which supports foreign reporting in undercovered parts of the world. Follow the fellowship on Instagram (@thejohnaproject) and Twitter (@thejohnaproject).

Copyright 2019 NPR. To see more, visit https://www.npr.org.

DAVID GREENE, HOST:

President Trump is meeting with the president of Mongolia today at the White House. Mongolia is strategically important. It's landlocked right between Russia and China. It's also a country in transition with its economy and workers moving from agriculture to mining.

In the final part of our series on Mongolia, NPR's Emily Kwong flew to a mega mine to meet people finding work along the coal road to China.

UNIDENTIFIED PERSON: (Speaking Mongolian).

EMILY KWONG, BYLINE: We touched down in mining country at 9:22 in the morning.

UNIDENTIFIED PERSON: Ladies and gentlemen, we have landed at Khanbumbat Airport in Oyu Tolgoi.

KWONG: Outside our plane window is Mongolia's biggest mining project. Oyu Tolgoi has a movie theater, an apothecary, a hair salon. My interpreter, Ganbat Namjilsangarav, and I visit the cafeteria for lunch, bustling with miners in orange uniforms.

How are you doing, Ganbat?

GANBAT NAMJILSANGARAV: Good. Very big mess hall.

KWONG: People here shake hands, a very Western practice, which slightly unnerves Ganbat. They're not behaving like Mongolians, he jokes as we scoop fried noodles onto trays. I tell him the cafeteria reminds me of Google.

It's very regimented and clean. And the Gobi's like your Silicon Valley.

Mongolia rapidly transitioned from Soviet-style communism to free-market democracy in 1990. Herding has diminished, while mining has only grown. It's introduced volatility to Mongolia's economy but also opportunity. In a nation where jobs are drying up in the countryside and people are desperate for work, the Gobi has become a destination for jobs, both formal and off the books. And it's a younger generation, the sons and daughters of herders and agriculturalists, taking on this work. Gulnara Dariiga grew up among mountains on the opposite side of the country.

GULNARA DARIIGA: (Through interpreter) Selenge is beautiful, with a nice river and berries. The problem is there's no jobs for young people.

KWONG: In addition to copper and gold, Mongolia exports millions of tons of coal to China every year by truck. And Gulnara is one of thousands of these drivers ferrying coal from Tavan Tolgoi, another major mine, across the southern border. Mongolians go by their first names. The 38-year-old mother of four does her makeup in this cab and sleeps here, too. Trucks idle in gridlock like a row of dominoes. Gulnara has waited up to seven days in this line. It's exhausting work.

DARIIGA: (Speaking Mongolian).

KWONG: So why do it? Over the rumble, she tells us the money makes it worth it. Her Chinese employers pay her in yuan upon delivery - the equivalent of 260 U.S. dollars. That kind of money goes far here.

(SOUNDBITE OF PHONE CHIMING)

KWONG: Gulnara's monthly income is double what most Mongolians make. Those with ancillary services to support the mining industry are making money, too - fuel suppliers, car mechanics, cooks selling hot meals.

(SOUNDBITE OF POT CLANGING)

KWONG: In fact, a whole community has emerged from the dust to support coal truck drivers right before this border trip. Locals call it Tsagaan Khad or White Rock.

(SOUNDBITE OF PHONE CHIMING)

KWONG: The cellphone of 53-year-old Batdelger Genden won't stop ringing. She just opened a new restaurant in White Rock and word has gotten out.

(CROSSTALK)

KWONG: The restaurant tables are heaped with candy and soda for the grand opening. The playlist is all Dolly Parton, music befitting an outpost on the mining frontier.

(SOUNDBITE OF SONG, "WE'VE GOT TONIGHT")

DOLLY PARTON: (Singing) Come take my hand now...

KWONG: And for locals in White Rock, Batdelger is like a mother hen.

BATDELGER GENDEN: (Through interpreter) I wanted to create a warm atmosphere with this restaurant. The drivers experience all kinds of problems - truck breakdowns, getting cheated of their salary. I try to help them.

KWONG: Mining may be lucrative, but the conditions are harsh. Trucks stir up fragile topsoil with their constant coming and going, turning the streets of White Rock dark and blustery. But the dust was far worse in the early days before the coal road was paved, Batdelger says. Drivers eager to reach China were cutting across herders' pastureland.

GENDEN: (Through interpreter) Local herders protested. They even smashed truck windows.

KWONG: Mining may be a boon to the national economy. But locally, tensions persist, not just around dust storms but environmental issues, too, like water scarcity and desertification. Herding groups have taken the industry to court around their environmental and economic impact. Fifty-one-year-old Otgonduu Khuudeg remembers when mining came to Omnogovi province. The usual quiet of the pastureland was disrupted by the rumble of trucks.

OTGONDUU KHUUDEG: (Through interpreter) The road to the Gobi became like lines on a human palm. These coal trucks, they're hitting and killing animals.

KWONG: Half a dozen of his camels were killed by passing trucks. And when Oyu Tolgoi, that massive copper and gold mine, was preparing to break ground, he had to relocate. Otgonduu and his wife were one of 11 families physically displaced. Ironically, that payment allowed them to continue herding, not with camels but with cows. They purchased a bull with Oyu Tolgoi's money to breed cows. If they are successful, Oyu Tolgoi has pledged to buy their beef to feed to miners in the cafeteria. Such a relationship was unheard of 15 years ago, but Otgonduu feels like he has no other choice.

KHUUDEG: (Through interpreter) We are already old. And no one will hire us. We can't do other jobs. This is what we know how to do.

KWONG: Mongolia has a tradition of herding animals and a deep cultural connection to the land. But as the nation focuses on mineral extraction as a means for participating in the global economy and lifting people out of poverty, what will become of that land? Plenty of Mongolians fear the country's direction. One herder in the Gobi told me Mongolia is like a small island in a blue planet. If we help preserve the environment, I think it will be helpful for the rest of the world.

Emily Kwong, NPR News, Omnogovi, Mongolia. Transcript provided by NPR, Copyright NPR.

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