Mongolia's parliament on Friday appointed Chimed Saikhanbileg as prime minister, more than two weeks after the ouster of his predecessor amid an economic crisis prompted in part by the stalled Oyu Tolgoi mine expansion.
After sporting eye-watering growth rates for years, foreign investment plummeted last year and is already down 59% for the first three quarters of 2014.
The massive copper-gold mine, 66% owned by a Rio Tinto subsidiary with the Mongolia government holding the rest, has the potential of adding 30% to the country's gross domestic product, but the underground expansion has been in limbo for years due to disputes about funding.
Given the fact that Saikhanbileg had been a cabinet member for the past three year and therefore would've been involved in discussion about Oyu Tolgoi does not bode well for any real breakthrough.
Dale Choi, an independent Mongolian mining analyst, said the appointment of Saikhanbileg represented "business as usual" for the government, and could further drive away foreign investment."If Mongolia cannot get its house in order now then everyone will have to wait until 2016 (elections)… and only a few large foreign investors have the funding cushion to afford that," Choi said in emailed comments.
The ruling party last week appeared to tap Amarjargal Renchinnyam as the the new prime minister, one of three candidates for PM together with Saikhanbileg, but the respected economist who is considered a pragmatist fell out during subsequent rounds.
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