Mongolian Coalition Cause for Concern?https://in.reuters.com/article/2012/07/20/mongolia-government-idINL4E8IK0E320120720
Mongolia coalition takes shape, fans fears of resource nationalism
By Michael Kohn | ULAN BATOR | Fri Jul 20, 2012 8:51am IST
ULAN BATOR, July 20 (Reuters) - Mongolia's Democratic Party (DP), which failed to win enough seats in last month's elections to govern alone, has agreed to form a coalition with populist fringe parties in a move that could worry foreign investors, local media said.
The broadly free-market DP won 31 of the 76 seats available in the June 28 poll, eight short of an overall majority, causing concern among foreign investors that the party would be forced to make concessions to the growing number of "resource nationalists" in the country's parliament...
The two smaller parties, which campaign together as the "justice coalition", also want to restrict the number of years a foreign firm can operate in Mongolia and have called for the coveted Tavan Tolgoi coal project to be kept under 100 percent Mongolian control.
They have also demanded a renegotiation of a 2009 government agreement which gave Canada's Ivanhoe Mines, now controlled by mining giant Rio Tinto, 66 percent ownership of the $13 billion Oyu Tolgoi copper-gold project.
We anticipate substantial pressure for policies to be more populist and resource nationalist which in return will result in (an) elevated level of volatility for global Mongolian resource equities" Ulan Bator-based Frontier Securities said in a note to investors late on Thursday.
"Therefore investors would be well-advised to diversify their Mongolian portfolios."
The new coalition also includes the Civil Will and Green Party, which one analyst described as more closely aligned to the main DP's moderate stance on foreign investment. He said it could help dilute the influence of the nationalist parties...