Two events on Sunday promise to raise the global profile of the country of just 2.8 million people: the planned sale in New York of a stunning skeleton of Tyrannosaur bataar, an Asian cousin of Tyrannosaurus rex; and a meeting in Chicago of NATO, the North Atlantic Treaty Organization, which Mongolia will attend as a formal, though not full, partner, for the first time.

The events are freighted with very different emotions.

Mongolia has protested the planned sale of the nearly intact dinosaur skeleton – its teeth alone are six inches (15 centimeters) long – by Dallas-based Heritage Auctions.

The origins of the eight-foot-high, 24-foot-long (2.4 meters high, 7.3-meters-long) raptor is unclear but there are suspicions it came from Mongolia, as this statement from President Elbegdorj Tsakhia shows.

In promotional material, the auction house mentioned the dinosaur inhabited the Gobi Desert, long ago, and in his statement, President Elbegdorj noted that, saying if the skeleton originated in Mongolia, the auction was illegal and “the fossil must be returned to Mongolia.” He called on the auctioneers to immediately disclose its origins.

David Herskowitz, director of natural history at Heritage Auctions, told Bloomberg Business News that the fossil was initially exported to Japan and then to England, from where it entered the U.S. legally and was prepared.

The skeleton is on public display today at Center 548 (548 W. 22nd Street,) New York.

From dinosaurs to a more modern kind of might: President Elbegdorj is due to attend NATO’s annual meeting in Chicago on Sunday, representing a freshly minted partnership with the alliance.

NATO’s Web site reports here on Mongolia’s participation in the new “Individual Partnership and Cooperation Programme” (Mongolia is the first country to have formal relations with NATO on this basis):

Since 2005, Mongolia has collaborated with NATO, in Kosovo and Afghanistan, as a way to counter the enormous power of neighbors China and Russia, neither of which are NATO members. Just over 1,300 Mongolian soldiers have served alongside NATO- or American-led forces, NATO said.

Dubbed the “Third Neighbor” policy, Chinese analysts are following the balancing act closely.

Huo Wen, a Mongolia-based reporter for the state-run People’s Daily, wrote that NATO was “roping in” Mongolia as an “important part of its eastwards expansion strategy.” In the article, he wrote:

“Especially against the background of the United States ‘return to Asia’ strategy, Mongolia’s position within NATO’s strategy becomes increasingly important.”

The China Daily noted the development too, adopting a low-key tone.

As if all that weren’t enough, the country is embroiled in a politics-and-corruption scandal that some fear endangers Mongolian democracy, according to a report in the Wall Street Journal entitled “Genghis Democracies.”

For a Mongolian take on some detail of the corruption allegations rocking politics, follow a report in The UB Post and another by Reuters.

Perhaps as part of maneuvering for elections set for June 28, the current president and his popular predecessor, Nambaryn Enkhbayar, are locked in an intense rivalry that may have led to Mr. Enkhbayar’s recent jailing on corruption charges, Bloomberg Business News reported.

Mr. Enkhbayar was granted bail on Monday and will remain hospitalized after refusing water for 10 days to protest his detention. He and his family have said his arrest last month, on charges dating as far back as 2000, was an attempt by the government to keep him from taking part in the elections, Bloomberg reported.

The vote is likely to be contentious. At stake is management of a massive resource boom that has seen Mongolia’s economy surge 16.7 percent in the first quarter of 2012, after very fast growth in 2011.

Mongolia is debating how to retain control of its wealth in the face of Chinese interest – China currently accounts for more than 80 percent of its import and export trade – and interest from foreign mining companies, according to a report from Bloomberg.

“Our struggle to get political freedom was a long one and we cherish that. We will not let foreign government-owned entities control strategic assets in Mongolia,” Vice Finance Minister Ganhuyag Chulu

As Dow Jones Newswires reports Friday, Chinalco Mining Corp., a unit of state-owned Chalco, is planning to raise up to $1 billion in an initial public offering in Hong Kong. Pre-marketing will begin Monday, and the company has received regulatory approval from the stock exchange.

Chinalco Mining controls the Toromocho copper project in Peru. News of its IPO comes as the Hang Seng Index has fallen for 10 out of the last 11 sessions, erasing earlier gains to be up just 1.7% year-to-date.

Chalco’s bid to buy a controlling stake in Mongolia-focused SouthGobi Resources from Canada’s Ivanhoe Resources, meanwhile, continues to be in limbo as the country approved a law Thursday that caps future foreign investment in industries including mining. The new law requires foreign investors to obtain government review and parliamentary approval for investments at and above 49%. Analysts say the law was driven by the Chalco-SouthGobi deal. SouthGobi is about 14%-owned by sovereign-wealth fund China Investment Corp.

Another copper miner, China Nonferrous Mining Corp., which owns mines in Zambia, started taking orders from institutional investors Monday for its up to $313 million IPO in Hong Kong.

By WSJ Staff

The proposal, which is seen to be passed into law by June, blocks foreign investors from owning more than 49 per cent of companies to be put up in the resources, finance, telecommunications and media industries in Mongolia. Should foreign investors pursue, they will be required to first secure government review and parliamentary approval.

The draft law specifically zeroes in on potential deals worth $75 million and above, The Wall Street Journal reported.

Foreign-investors backed by state-governments, aside from the government review and parliamentary approval, will also require special approval to buy into their preferred sectors.

In an interview with Bloomberg News, Mongolian Vice Finance Minister Ganhuyag Chuluun Hutagt said the list of strategic assets and industries will be released later. Uranium and rare earths minerals will be likely included in the list, he said.

If there’s anything fortunate, existing companies in Mongolia that are above the 49 per cent ceiling are safe from the draft law, such as the $6 billion Oyu Tolgoi copper mine of the Rio Tinto Group.

“Investors don’t like it when the rules of the game are changed after the game has started, and changed often at that,” chief investment strategist Dale Choi said in Bloomberg News. “It would be in the interests of Mongolian people to make a decision based on commercial factors, rather than geopolitical factors.”

Unless barred by the president of Mongolia, the law takes effect 10 days after, he said.

The people of Mongolia, from as far as two years back, have pressured the federal government that albeit being a nation abundant with coal, copper, gold and other natural resources, the populace believed they and their country are still at the losing end as foreigners will just usurp their assets, get rich and once depleted, leave Mongolia and its people poor and potentially jobless.

The Mongolian populace, currently registered at 2.8 million, also wants that foreign investor presence in companies in key assets are composed of entities representing several nations, instead of solely owned.

“We don’t want to be faced with one sovereign,” Mr Ganhuyag said. “Our struggle to get political freedom was a long one and we cherish that. We will not let foreign government-owned entities control strategic assets in Mongolia.”

Mongolia, known for its coal reserves, currently have key mine projects but are however still in their infancy.

According to a February report by the World Bank, total world sales of coal in 2011 hit $2.2 billion, half of which came from Mongolia’s exports.

Latest data from the Customs General Administration of Mongolia showed that 89 per cent of Mongolia’s total exports in April were mostly made up of mineral resources.

Exports to northeast Asian countries were $389 million of a total $409 million, the data show.

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But could that be about to change?

On Thursday Mongolia’s parliament passed a new law requiring both government and parliamentary approval for any foreign investments worth more than 100bn tugriks ($76m) that buy a stake of more than 49 per cent in businesses in certain strategic sectors.

The law has been softened significantly from an initial version that would have limited foreign stakes to 49 per cent in wide swathes of the economy, including sectors as varied as food, transportation and real estate.

Under the final version of the law, foreign investments need approval if they fall into any of three “strategic” sectors: minerals, banking and finance, and media and telecommunications, according to a translation of a draft read to parliament (click here to download Word document) and conversations with those close to the process. The official text of the law has not yet been released.

Investments in these sectors of more than $76m for a stake of more than 49 per cent will have to be approved by Mongolia’s Foreign Investment and Foreign Trade Agency (Fifta), and subsequently by parliament. Each has 45 days to make a decision, bringing total approval time to around 90 days. Certain other transactions may also need approval, such as transactions that may affect Mongolia’s commodity exports or create a monopoly in certain commodities markets.

Although the new regulations will slow the pace of foreign investment, investors expressed some relief at the final version of the law, which has a narrower scope and does not apply to transactions that occurred before the law was passed.

“It’s a good law for Mongolia and provides stability and clarity for investors,” said Eric Zurrin, chief executive of ResCap, a boutique investment bank in Ulan Bator. “This brings Mongolia more in line with mature, resources-rich economies like Australia and Canada.”

Others were less sanguine and said uncertainties over the law – and over elections in June – have left some major deals hanging.

“There are a couple big deals where lenders became nervous and put things on hold,” said Jim Dwyer, head of the Business Council of Mongolia. Foreign investment was crucial for development in the mining sector, he added. “The minerals are here but they are still in the ground, and money is needed to get them out.”

As Mongolia prepares for June’s nationwide parliamentary elections, managing the country’s resources in a way that best benefits Mongolians is a key political issue. The investment law sprang to the top of the parliamentary agenda after a failed attempt by Chalco, the Chinese state-owned metals company, to buy a majority stake in a coking coal mine in the Gobi desert.

The Chalco deal now appears to be on the rocks after Mongolia threatened to suspend some of the mining licenses owned by the company it was trying to buy.

With the new law in place, perhaps foreign investments in future will at least have a clearer idea of what they are in for.

by Leslie Hook

The bill has been watered down considerably since it was first drafted by a group of backbench MPs alarmed by a decision by Canada’s Ivanhoe Mines to sell its 58 percent stake in coal miner SouthGobi Resources to the Aluminum Corporation of China (Chalco).

The law stipulates that foreign investors are allowed to own a maximum of 49 percent of companies involved in the mining, finance, media and telecommunications sectors before being subject to scrutiny by a government panel.

But it only applies to deals valued at above $75 million, or ones involving state-owned companies like Chalco.

Aspire Mining, which owns the Ovoot coking coal mine and rail project in northern Mongolia, said the new law would provide more certainty for investors in Mongolian resources.

“The only impact for us is in terms of adding a layer of time in the approvals process,” Aspire managing director David Paull told Reuters.

He said it was not likely to limit potential funding sources for Aspire’s mine and rail project, expected to cost a total of $2 billion.

“If there’s a foreign SOE (state-owned enterprise) in the funding structure, we will need to have that approved… It’s really about finding the package the Mongolian government’s comfortable with,” he said.

Stakeholders said they were encouraged by the way parliament responded to the concerns of foreign investors about the law.

After the bill’s first draft appeared, Mongolia’s private sector banded together to lobby parliament, criticising the failure to define key terms like the “minerals” and “finance” sectors and its catch-all provisions about what is “strategic”.

“The FI (foreign investment) Law bill caused an overwhelming coming together of the business community including key Mongolian entities affected as well,” said Jim Dwyer, executive director of the Business Council of Mongolia. “I never have seen anything like it over the last 10 years.”

Among the improvements was the reduction of the number of strategically important sectors to just four, headed by mining, he said.

SouthGobi, whose planned sale to Chalco first prompted lawmakers to act, declined to comment on how it would be affected by the new law.

SouthGobi Resources’ licences are now believed to be suspended, but the company said it has not received any official notification.

According to Xinhua news agency, citing local media, the office of SouthGobi Resources’ Mongolian subsidiary, SouthGobi Sands, was sealed off by authorities pending an investigation into corruption.

Former president Nambar Enkhbayar, freed on bail this week over corruption charges his family says were fabricated, is the most popular figure fighting the June 28 election, opinion polls showed just before his arrest on April 13.

Conspiracies abound in Mongolia, a former Soviet satellite that has become one of the world’s most attractive investment destinations with first-quarter GDP growing 16.7 percent, and some speculate the robustly nationalist stance of Enkhbayar, president from 2005 to 2009, played a role in his arrest.

He wants to renegotiate a landmark 2009 deal that gave 66 percent of the huge Oyu Tolgoi copper project to Canada’s Ivanhoe Mines, and also says the 7.5-billion tonne Tavan Tolgoi coal mine – expected to be listed on overseas stock exchanges next year – should remain in Mongolian hands.

Enkhbayar is likely to emerge stronger as a result of his arrest, said Luvsandendev Sumati, director of the Sant Maral Foundation, which polled voters in April.

“I think the aura of victimization will boost his popularity,” he said, adding that a surge in his support would make it less likely that a single party could form a government.

Enkhbayar leads the Mongolia People’s Revolutionary Party (MPRP), a breakaway faction of the ruling Mongolia People’s Party (MPP). Before his arrest, he was expected to be a kingmaker in the new parliament.

“He is the father figure for resource nationalism, and the MPRP will definitely try to capitalize on this and maximize their chances to get more MPs in parliament,” said Dale Choi, an analyst with Ulan Bator-based Frontier Securities.

“In parliament they will pursue their resource nationalism agenda, which will create more trouble for foreign investors.”

ANTI-INVESTOR LAWS, DELAYS

More anti-investor legislation would be worrying, but an extended period of post-election uncertainty could also further delay action on crucial issues such as new mining laws and the development of Tavan Tolgoi.

The Tavan Tolgoi pact has been postponed several times, and its IPO has been delayed as the government struggles to find a way to satisfy domestic and foreign interests.

“We aren’t sure who will win (the election) and I don’t think this uncertainty is very helpful if Mongolia is to pass the laws it needs to pass,” said a foreign mining executive.

Foreign investors have long coveted Mongolia’s largely untapped mineral reserves, which have been valued at about $1.3 trillion, banker Macquarie says, even though just 27 percent of the country has been geologically mapped.

Its coal and copper deposits are among the biggest in the world, and southern neighbor China is a guaranteed market.

But while worries about Mongolia’s frail legal system and volatile politics may have been sharpened by the arrest, few think the country – central Asia’s only democracy – faces an extended period of disruption.

“I genuinely see it as electioneering and jostling by the candidates,” said Eric Zurrin, chief executive of Resource Investment Capital, a fund with interests in Mongolia.

Foreign investors were already alarmed by a bid by vote-hungry rebel lawmakers to pass a law to ensure majority state ownership in strategic sectors such as mining and banking, but Zurrin said stability would return once votes are counted.

“Naturally foreign investors are cautious but this is exactly what we saw in Peru last year prior to the election, which then calmed substantially after a new government was brought in.”

Experts say Mongolia’s courts remain weak and vulnerable to political pressures, and even Enkhbayar’s fiercest critics concede the case against him has been handled badly.

“The main political troublemaker in this country is Enkhbayar himself, and there has definitely been an attempt by our political elite to isolate and neutralize him,” said Sumati.

POPULIST MOVES

Critics say Mongolia’s showboating lawmakers have grown accustomed to parliamentary democracy, but remain ill-equipped to tackle tougher issues, preferring instead to draw up laws designed just to please voters.

The law to limit foreign investment, passed in diluted form on Thursday, was submitted by a group of rebel backbenchers who were also behind a much-criticized windfall tax imposed in 2006 and repealed in 2009.

“This law was not submitted because it is important for Mongolia – it’s because election time is coming and they need to be loved and need to be liked,” said Sambuu Demberel, head of the Mongolian National Chamber of Commerce and a prospective parliamentary candidate.

Mongolia’s willingness to put populist politics first was in evidence recently with SouthGobi Resources. The new foreign investment laws were prompted by SouthGobi’s parent company Ivanhoe’s plans to sell its majority stake to Chinese aluminum giant Chinalco. SouthGobi has since seen its licenses suspended pending a corruption investigation.

Fears about China were central in another case involving a Canadian miner, Khan Resources, which is suing Mongolia after being stripped of rights to develop uranium in the country’s northeast.

Khan, accused of trying to sell out to the China National Nuclear Corporation, said it only turned to China after it became clear Mongolia was trying to kick out the company to appease Russia.

Enkhbayar won bail after a hunger strike and a global campaign by his family and legal team.

“The current actions of the government have proved Mongolia is not a democracy, and it clearly shows the rule of law doesn’t work over here,” said Batshugar Enkhbayar, a former investment banker with J P Morgan and the ex-president’s son.

“The MPRP has very strong support and therefore, my father’s opponents made these false charges right before the elections.”

Though Enkhbayar’s family said the government broke its own laws to defeat him, critics of the former president said his arrest was proof that Mongolia’s legal system had improved and that no one is above the law – not even elder statesmen.

“For me, and as far as investors are concerned, it is a positive development because there seems to be some progress in enforcement of anti-corruption regulations,” said Choi.

But the election was unlikely to produce a government willing to turn against foreign investors, he said.

“Economic realities mean the ordinary Mongolian is more concerned about getting a job and not about transactions involving Chinese corporations.”

(Editing by Clarence Fernandez)

The situation in Mongolia was brought to international attention when Senator Dianne Feinstein from the U.S. state of California stood before the U.S. Senate in Washington Monday describing the case of Nambaryn Enkhbayar, the president of Mongolia from 2005 until 2009.

The Senator, referring to the former president as a distinguished international statesman, said he is now facing “so-called allegations” of corruption in the country he led “so well and so long.”

Mr. Enkhbayar was forcibly arrested by Mongolian SWAT teams on April 13th after what the Mongolian government said was his failure to appear for questioning on charges dealing with instances of corruption.

At the time of his arrest, Mr. Enkhbayar, who was defeated for Mongolia’s presidency by current president Elbegdorj, had been making an attempt at a political comeback. He had formed a third party in anticipation of Mongolia’s next national election in June and had proclaimed himself a candidate for the Parliament.

Senator Feinstein said the corruption charges brought against the former president were brought by Mongolia’s anti-corruption agency, an organization that Mr. Enkhbayar had established while he was president. While applauding vigorous efforts to fight corruption, the Senator added “it is equally important that those fighting corruption avoid a sense of involvement in such practices themselves.” Senator Feinstein continued, “to say the least, the bringing of charges against the political leader in the midst of an important election campaign is, to say the least, unusual.”

While incarcerated, Mr. Enkhbayar, according to the Senator, was not permitted adequate access to family and to counsel and reportedly received abusive verbal treatment.

The former Mongolian president then initiated a dry hunger strike to protest those circumstances, he was denied adequate medical treatment. The Senator said it was only when his health started to fail that he was released on bail. The charges remain.

The California Senator says the promise of Mongolia “can be negatively impacted by the practices we have seen in the case of Mr. Enkhbayar.”

Mark Minton, the U.S. Ambassador to Mongolia from 2006 to 2009, tells VOA that the growth of the rule of law and democratic institutions in Mongolia over the last two decades has been “phenomenal.” He adds none of those who he calls the “friends of Mongolia” want to see a “backsliding on the progress that has been made.” He says the treatment of former president Enkhbayar contained enough irregularities that questions arising from the treatment need to be answered.

Ambassador Minton said Mongolia’s success in instituting democratic processes and the rule of law brings this case to the forefront of international concern. Also, says the former ambassador, there is a great deal of interest being shown by international investors into Mongolia’s rich trove of natural resources. Minton says those investors need to believe that Mongolia is a place where the rule of law is maintained and that the country is politically stable. He says the U.S. has both political and economic interest in Mongolia.

He adds that what is needed in the case of Mr. Enghbayar in addition to his receiving effective medical treatment is the application of a credible due process with full rights of the defendant observed carried out in a “timely and transparent way.” That, he says, would reaffirm Mongolia’s status as a country where the rule of law prevails.

Ira Mellman

When it goes into effect, the law will require foreign investors to obtain government review and parliamentary approval for investments at 49% and above into industries such as resources, finance, telecommunications and media, according to analysts in Ulan Bator. The cap is specific to deals valued above about $75 million.

Investors owned by governments, such as state-backed Chinese companies, will also need special permission to buy into the sectors.

Foreign investment is critical to Mongolia’s future as a commodity powerhouse. But the law reflects anxiety among ordinary Mongolians that foreigners would enjoy the spoils of the country’s hoard of coal, copper, gold and other natural resources. Its passage comes weeks before a parliamentary election, the first in four years, for which politicians are expected to campaign on populist promises of ensuring profits are retained in Mongolia.

Dale Choi, chief investment strategist at Frontier Securities in the Mongolian capital, said in a research note Thursday that the legislation would take effect 10 days after its publication unless vetoed by the president.

Full details of the legislation weren’t available Thursday night, but his note said key provisions hadn’t changed since they were published earlier in the week.

The impetus to tighten foreign investment regulations now was spurred by a deal announced in April that would give investors backed by the Chinese government more sway over Mongolian coal reserves.

Still, the final version of the law carries less sting than foreigner investors had initially feared, in part because it wouldn’t be retroactive.

“Foreign investment should continue to be the lifeblood of Mongolia’s strong mining-sector ramp-up,” Jim Dwyer, executive director of the 220-member Business Council of Mongolia, said by email.

Ahead of Thursday’s vote, analysts also predicted revisions are possible once a new parliament is sitting.

Previously, Mongolia set few hard limits on foreign investments. In the all-important mining sector, the government had previously wanted about 34% of strategic mineral deposits that were developed privately, and retained stakes of up to 51% on others, including uranium mines, according to the business council.

Historically known for nomadic ranchers who produced cashmere, Mongolia is increasingly known for its coal.

Driving the economy is major mining under way near the border with China, the expected buyer for the mineral output.

But in the landlocked country, which broke from Soviet influence just over two decades ago and formed a democracy, China also makes some Mongolians nervous for its size and influence.

Mongolia’s key mine projects remain in their infancy. The projects are already drawing foreign investment, which has pushed gross domestic product growth rates above 16% in recent quarters. But the nation’s increasingly urban and still-poor population so far sees limited trickle down, making it a key issue going into elections.

Specifically spurring momentum for a foreign investment law, according to analysts, was an April 1 deal by Rio Tinto Ltd.-controlled Ivanhoe Mines Ltd. to sell a large stake in a coal company to a state-owned Chinese investor. Under that plan, Aluminum Corp. of China, ACH -1.46% or Chalco, would pay over $920 million to buy up to 60% in coal producer SouthGobi Resources Ltd., 1878.HK -1.22% already about 14%-owned by the sovereign-wealth fund of China, China Investment Corp.

SouthGobi, which sits on roughly 800 million metric tons of coal, said some of its mine licenses were suspended by local authorities after the China deal was proposed. Chalco took another step into Mongolia days later, buying control of Winsway Coking Coal Holdings Ltd., 1733.HK -3.68% another coal miner.

Two other mine projects are worth hundreds of billions of dollars and don’t appear immediately impacted by the new legislation, namely a copper and gold project called Oyu Tolgoi, controlled by Rio Tinto and Tavan Tolgoi, which is being privatized with a structure in line with the new legislation.

Write to James T. Areddy at james.areddy@wsj.com

The country of Genghis Khan where nomads and wild horses roam free beneath brilliant blue skies is in danger of becoming a thing of the past.

An unprecedented economic boom is bringing about far-reaching social change.

Soon, over a third of Mongolia’s population will have left the countryside to live in the capital city of Ulan Bator.

Few aspects of life here are untouched by the relentless drive to modernise – and that includes the nation’s sport.

Badar Uugan Enkhbatyn is one of the most famous people in Mongolia. Dressed in a designer tracksuit, with his baseball cap pulled down low, he carries himself with the air of an MTV popstar.

His fame, however, owes nothing to music and everything to boxing – a relatively new sport here. In 2008 he won Olympic gold – one of two Mongolia earned in Beijing, 44 years after it first competed in the Games.

Badar Uugan is more than just an athlete here. Twenty-one years after the end of communist rule, he embodies what modern Mongolia hopes to be – strong, independent and making a mark on the international stage.

I meet him in the industrial city of Erdenet, where he has taken a break from training to attend the traditional sports festival of Nadaam.

Naadam and the three ‘manly games’

These gatherings bring the country to a standstill. The games are over 800 years old and were originally developed to test military skill. They involve three so-called ‘manly games’ – archery, horse racing and wrestling.

The latter two events are by far the most popular – there is a belief here that touching the sweat of a competition-winner will bring spectators good luck.

The horse races take place across the expanse of the steppes and begin shortly after sunrise. After a four-hour ride out, around 60 riders arrange themselves on the starting line. All are young – the youngest is aged around seven – all are are paid and most come from nomadic families.

Then with almost no warning, in a swirl of red, dry dirt they set off.

The sound of cracking whips, thudding hooves and guttural screams accompany the race back – which is ridden at breakneck speeds across a spectacular terrain.

An hour later, the winners are met at the finish by crowds at least five people deep, cheering loudly and in festive mood.

It is, however, at the wrestling arena that Badar Uugan and I finally meet. Here the best wrestlers in the region fight it out until one of them prevails.

Bouts are not timed. They continue indefinitely until one of the competitors touches the ground with their upper body, knee or elbow.

Each sportsman will have a sort of personal cheer-leading poet – a man, immaculately dressed in a bright silk gown and hat, who improvises verse that celebrates the merits of his fighter.

Until recently, this festival was Mongolia’s sole source of sporting legends.

New heroes

But times have changed and Badar Uugan’s presence inevitably causes a stir. As we talk, fans rush to talk to, gawp at or demand a vigorous handshake from their Olympic hero. So how does he handle the fame?

“At the beginning it was difficult,” he tells me. “Mongolians can get very excited. On the streets people would suddenly appear, jump on me and hug me!”

Badar Uugan remains empathetic though; “You have come here during the Naadam and you have probably seen the three manly sports but the Olympics is a bit different.

“After four decades of expectation, Mongolia finally got a gold medal. When you get something for the first time, it’s special, so I’m proud of myself too.”

The impact he has had by succeeding in the relatively modern sport of boxing has not eluded him either.

“After the Games people became more interested in a range of sports. They started to realise it’s possible to win a gold in the Olympics. It’s down to you, you are the one who can achieve success.”

Yet, choosing boxing at all was a simple twist of fate. Badar Uugan grew up in the sprawling, shanty suburbs that now surround Mongolia’s capital. His family struggled to make ends meet and as a child, he fell into bad company.

“I was a naughty kid. I would say I was 150% bad!” Badar Uugan says with a laugh.

It was Badar Uugan’s repeated scrapes that alerted his grandfather to the fact that the boy was a gifted wrestler and lessons soon began at home – but it was the street-smart, edgier sport of boxing that grabbed his attention.

“It was my uncle who suggested boxing,” he recalls. “He said if you’re out on the streets beating other kids up, then why not become a boxer so that you can beat people up legitimately.”

Olympic dreams

Since then, Badar Uugan’s influence has spread far and wide. A two-hour drive away from the electricity pylons and mine-scarred hillsides of Erdenet, is one of Mongolia’s two small Olympic training camps.

It has become a revolving door for Olympic hopefuls, keen to repeat Badar Uugan’s success across a variety of sports – including basketball, shooting and long-distance running.

Taivankhuu Khurelbaatar, a judo coach, warns me not to underestimate the boxer’s influence: “There was a special effect on young people when Badar won gold. They got a huge belief that in becoming an athlete you can promote Mongolia and be proud to be Mongolian.”

It is this added desire to represent their fledgling democracy on the world stage, that has become a crucial driving force here.

Wedged between two giant neighbours, China and Russia, Mongolia has struggled to have its voice heard but the discovery of huge mineral wealth has brought international investors knocking and the speed of economic and social change is breathtaking.

One estimate suggests Mongolia’s economy grew by a staggering 9.8 per cent this year.

The result is that the over 1m people have now poured into the capital. A high proportion of new arrivals live well below the official poverty line but migrants continue to come looking for jobs, education and opportunity.

Meanwhile, the city centre feels increasingly like one big construction site. Glamorous glass and steel buildings are rapidly rising to house international businesses, hotels and even a designer shopping mall for Mongolia’s oligarchs and their wives.

Even the odd monk can be spotted stocking up on ‘must have’ labels.

This aspect of city life is well out of the reach of most Mongolians but there is a palpable and shared desire to modernise almost every aspect of life.

As coach Khurelbaatar says: “By succeeding in the Olympic Games we are demonstrating to the world the success of Mongolia in our development, our culture and economics.

“Although the Olympics take place during peacetime, the Games are a bit like war… it’s all about competing against other countries.”

As a result, Badar’s 2008 gold medal has taken on a significance well beyond a simple sporting challenge – it has shown Mongolians across this nation that they can take on the world and win.

By Sangita Myska

BBC News, Ulan Bator

Ivanhoe, 51 per cent owned by international mining giant Rio Tinto (RIO-N45.83-0.74-1.59%), said after markets closed Tuesday that its net loss in the three months ended March 31 was $80.6-million (U.S.) or 11 cents per share.

That compared with a net loss of $492.5-million or 70 cents per share in the same 2011 period when the company took a $432.5-million loss on a change in fair value of derivatives.

Ivanhoe, which also has a 58 per cent interest in Mongolian coal miner SouthGobi Resources and a 59 per cent interest in copper-gold miner Ivanhoe Australia, said revenue for the quarter was $40.2-million, up from $20.2-million in the same 2011 period.

The company said overall construction of the first phase of the Oyu Tolgoi was 77.8 per cent complete at the end of the first quarter and had advanced to 82.2 per cent complete at the end of April.

“Construction remains on track to meet the mine’s targeted start of initial production in the second half of 2012. Commercial production is projected to begin in the first half of 2013.”

Last month, Rio Tinto tightened its grip on Ivanhoe as part of a $3.3-billion financing deal that has seen chief executive Robert Friedland step away from the company he founded.

“With Rio Tinto’s expanded support, we are counting down to the startup later this year of what I am sure will quickly grow to become one of the world’s most significant and successful, mining complexes,” Mr. Friedland said as the time.

Under the financing agreement, Rio Tinto will provide $1.5-billion in bridge financing to Ivanhoe and a standby commitment for a $1.8-billion rights offering by Ivanhoe.

The funding is in addition to $1.8-billion in interim funding that was agreed in December 2010

Under the rights offering, Ivanhoe shareholders will be able to buy additional shares at a subscription price of $8.34 per share on an equal proportional basis.

If shareholders fully exercise their rights, Rio Tinto will maintain its 51-per-cent stake in Ivanhoe. If shareholders do not exercise any of their rights, Rio Tinto’s stake in the company will increase to about 62 per cent.