Capture growth in Mongolia with Rio Tinto
If you missed going long on the Mongolian Tugrik -- if, like most people, you've never heard of the Mongolian Tugrik -- now's your chance to make up for lost time. Taking a position in Rio Tinto ( RIO , quote ) will allow you to capture future gains from Mongolia's chief export: copper ( JJC , quote ).
Mongolia has been booming over the last two years, so much so that Louis Vuitton opened a store in the capital city of Ulaanbaatar. Demand from neighboring China has sent copper prices soaring, and Rio Tinto has just taken control of the lucrative Oyu Tolgoi mine.
Oyu Tolgoi is a joint venture of the Mongolian government and Ivanhoe Mines, a Canadian exploration company. Rio Tinto increased its stake in Ivanhoe Mines to 51% on January 25. The mine is expected to produce 450,000 tonnes of copper per year by 2020, and has an expected lifetime of 100 years.
Despite the boom, the economy of Mongolia is still very undeveloped. Barter is still used throughout much of the country, but this will not prevent Rio Tinto from cashing in on Oyu Tolgoi's copper and gold ( GLD , quote ).
Oh, and that Mongolian Tugrik? It was the best-performing currency of 2010, up 15% for the year, topping the Australian Dollar, the Chinese Yuan, the Euro and the Brazilian Real. At its high point, you could only get 1033 Mongolian Tugriks for every dollar -- but it has since cooled off, and one dollar would have gotten you 1332 Tugriks last Friday. Meanwhile, Mongolia's government is trying to curb double-digit inflation.
Easy come, easy go.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
Mongolia has been booming over the last two years, so much so that Louis Vuitton opened a store in the capital city of Ulaanbaatar. Demand from neighboring China has sent copper prices soaring, and Rio Tinto has just taken control of the lucrative Oyu Tolgoi mine.
Oyu Tolgoi is a joint venture of the Mongolian government and Ivanhoe Mines, a Canadian exploration company. Rio Tinto increased its stake in Ivanhoe Mines to 51% on January 25. The mine is expected to produce 450,000 tonnes of copper per year by 2020, and has an expected lifetime of 100 years.
Despite the boom, the economy of Mongolia is still very undeveloped. Barter is still used throughout much of the country, but this will not prevent Rio Tinto from cashing in on Oyu Tolgoi's copper and gold ( GLD , quote ).
Oh, and that Mongolian Tugrik? It was the best-performing currency of 2010, up 15% for the year, topping the Australian Dollar, the Chinese Yuan, the Euro and the Brazilian Real. At its high point, you could only get 1033 Mongolian Tugriks for every dollar -- but it has since cooled off, and one dollar would have gotten you 1332 Tugriks last Friday. Meanwhile, Mongolia's government is trying to curb double-digit inflation.
Easy come, easy go.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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