May has been a busy month of deal-making for Mongolia. The country’s prime minister traveled to Dubai in May to sign an agreement that ends a two-year standoff with Rio Tinto, and paves the way for an additional US$ 5 billion of investment into the massive Oyu Tolgoi mine. Back on the steppes, Indian prime minister Narendra Modi traveled to Ulaanbaatar this to announce the opening of a US$ 1 billion credit line for Mongolia. The financing will be tied to the purchase of Indian goods. The deal is similar to what India’s Export-Import Bank provided to Nepal last November.
Both countries struck the deal with one eye on China – this is Modi’s first stop on a tour of China’s periphery in an effort to boost India’s ‘soft power’. Mongolia, ever mindful of its southern neighbor’s outsize influence, is actively seeking new trading partners.