Mongolians go to polls as mining deals eyed

On horseback, foot and motorcycle, Mongolians cast their ballots on Sunday in a tight race that will see the election of a government tasked with fighting inflation and tapping into huge mineral wealth.

A poll showed the ruling Mongolian People's Democratic Party (MPRP) with a slight edge over the Democratic Party, but if neither wins a majority in the 76-seat parliament, or Great Hural, the smaller parties on the ballot could be the real power-brokers.

"It's important that somebody who is capable of doing something, not just talking, is elected," said Enkhtaivan Saaral, 38, who like many Mongolians, herds goats and sheep on the country's rolling grasslands and lives in a round felt tent.

He will travel on horseback to the nearest district centre to cast his ballot in the polls which opened at 12 midnight British time and close at 3 p.m. British time on Sunday.

Political parties have pledged to curb inflation, which is at its highest level in more than a decade.

Reliant on its giant neighbours Russia and China for fuel and food, Mongolia's inflation rose to 15.1 percent last year as international prices soared.

But politicians themselves complain that cash promises made during campaigning aren't helping, if they aren't matched by fiscal reforms and new revenue sources.

The country of rolling grasslands and vast deserts that is home about 3 million people, many of them nomadic herders, saw economic growth of 9.9 percent last year, but voters say they are starting to feel the pinch.

The last election four years ago resulted in a hung parliament, leaving the parties to scramble to form a government to rule the landlocked country whose empire under Genghis Khan once extended west as far as Hungary.

The unstable coalition meant the country has been through three prime ministers since then, the latest Sanj Bayar, of the MPRP, the party that ruled Mongolia for much of the past century as a Soviet satellite.

CHALLENGE

The challenge this time for voters will be to elect a government with enough mandate to pass revisions to Mongolia's Minerals Law and ratify an investment agreement that would allow the Gobi desert Oyu Tolgoi copper and gold project to go head.

The agreement, which developers Ivanhoe Mines and Rio Tinto predict would increase Mongolia's GDP by 34 percent, could clear the way for future deals to extract its resources, which include coal and uranium.

"For sure Bayar will be elected. In the mining sector they have a platform and I believe that Bayar will carry it out in a just way," said Nyamtseren, 43.

Others were less sure.

"I support the Democratic Party," said Erdenebayar Nyam, 45, a machinery operator at a state-owned coal mine.

"Starting from last year they were visiting families and asking what issues they should address. So their platform must reflect the wishes of the people," he said.

Both parties say they support the investment agreements. But more populist parties are tapping into public suspicion that mining deals will give away Mongolia's wealth to foreigners and create environmental disasters. This could put them in a key negotiating position in a tight race.

New electoral rules that change the previous first-past-the-post system also mean there could be confusion at the ballot box and several days before an official result.

"The system of calculation is very complicated," said Luvsandendev Sumati, director of the Sant Maral Foundation, a non-governmental organisation that does polling and surveys.

"I'm afraid that if they calculate the ballots 10 times they will get 10 different results," he said.

"Before, I had a very good monthly salary of $200-$300 (100 pounds-150 pounds). Now $500 is too small a salary," said Batsuren Darga, 41, who owns a window factory.

"I'm coping. But for my workers I can tell it's a challenge."