I remember when James Passin was a newsletter writer back in the day. I think he wrote a newsletter called "Taipan". He than joined Firebird Captial which is a private equity firm that invests in frontier markets primarily in former Soviet countries. Passin is interesting because Firebird Capital is a major player on the Mongolia stockmarket. In fact I would say the big runup the market had a couple of years ago was directly related to buying by Firebird. They own substantial positions in several of the larger coal names in Mongolia. Here are some excerpts from a recent interview Passin gave:
TGR: What's happening in Mongolia in terms of growth and opportunities?
JP: Mongolia is the fastest growing economy in the world. The economy has been compounding at almost 20% in real terms. There's a lot of evidence that the real gross domestic product (GDP) is a lot higher, due to unreported economic activity. The trends underpinning this growth are still intact and the economy is growing from a very low base. It's likely, if not inevitable, that Mongolia's economy will continue to compound at an extraordinarily high real rate of return for the next several decades.
Mongolia is the 18th largest country in the world by size. It's sitting on the continental subduction zone between the Asian and Indian subcontinents. It hosts some of the world's most prolific mineral belts with some of the world's largest known undeveloped mineral deposits, some of which are just beginning to get into early phases of production. The exploration is just scratching the surface.
"Mongolia hosts some of the world's most prolific mineral belts with some of the world's largest known undeveloped mineral deposits."
Some geologists talk about the possible existence of 20 or 30 Oyu Tolgoi-type deposits in Mongolia not to mention the other minerals from iron to uranium to silver to molybdenum. There are also remnants of a sea, the origin of coal-bearing sedimentary basins, with projected 100 billion tons (Bt) thermal coal and 30 Bt coking coal, as well as hydrocarbon potential.
The mineral potential is already in the trillions of dollars and the true value is probably in the tens or even hundreds of trillions of dollars. It really is an incomparable destination for strategic investors.
Passin saying that the mineral wealth of Mongolia could be in the hundreds of trillions of dollars is certainly hyperbolic. However the country is very underexplored and I have no doubt that additional huge discoveries will be made in the future. Nevertheless I am playing Mongolia's increased wealth through real estate via Mongolia Growth Group and directly by buying shaes on the Mongolia Stock Exchange.
Disclosure: I am long OTCPK:MNGGF.