Russia and central asian former communist countrie Throughout central Asia, the Russian government has sought to regain the influence that it lost when the cold war ended. All the countries in the region now play extreme hard ball with westerm resource companies. There is a thread joining Kazakhstan, Turkmenistan, and now Mongolia.
It has become obvious that all of these nations now have a tacit agreement with the Russians, and are effectively part of a central asia pact (CAP) region, in contrast to the Warsaw pact region, and that Russian hegemony has been reestablished.
Now, you are asking, what does this have to do with TRQ?
The Chinese have been dealing with the Central Asia republics to get oil contracts, with mixed results. China has acted aggressively with respect to islands in the Pacific under Japanese control. Up till now, they have not acted nearly so aggressively on their land borders (Tibet being a major exception) which are in point of fact, much larger. The rubber hits the road in Mongolia. Traditionally, China has had influence there. Although there is this Shanghai Cooperation pact in which Russia and China consult each other against America and its allies, a definite strain is starting to develop between Russia and China precisely over Mongolia, and more specifically, over resources in the Gobi desert, closer to China than to Russia.
It is tense and neither power wants to rock the boat, and currently RIO and all the foreign Western mining interests are being sold down the river because of this balanced tension between Russia and China, allowing the GOM to call shots as if it were a real power. Both are quite ok with this, although China has some skin in the game through its ownership with RIO. China has attempted to play it both ways by staying in the Shanghai Cooperation group while extending its monetary influence in Australia and Canada, which serves 2 goals, access to resources, and sowing division in the Anglo-American camp.
The real question is whether China will be forced to take sides in Mongolia. Many posters, Jon Springer among them, believe that China's hands are tied as far as real aggression is concerned, and I must admit, they are probably right. If so, RIO/TRQ is doomed in the long run. If China can be influenced to shift its policy w/r/t Mongolia they will expect a big quid pro quo -- Australian political cooperation; they will attempt to widen the gap in interests between Australia with their British investors, and the U.S. with its military commitments in Asia. For example, they might put pressure on Australia to give up its U.S. bases. Very possible. All in all, the OT sits in the middle of the scale, and the outcome of its dealings with the GOM have alot to do with decisions in Beijing and Moscow, with Sydney, London and Washington watching closely with their teeth on edge. Ottawa is throwing in the towel.
Hard to see our investments at risk, but no doubt this situation is interesting . . .