“Mongolia is landlocked but not mindlocked,” remarked Mongolian Prime Minister L. Oyun-Erdene as he visited Washington DC this week and met with US Vice President Kamala Harris.

Oyun-Erdene appeared very eager to work with the Americans on a wide range of issues and expressed gratitude for the expansion of educational exchanges and the sending of additional US teachers to Mongolia as part of the Strategic Third Neighbour Partnership between the two nations.

Speaking at the White House stood alongside Harris, he said: “In the 1990s, the people of Mongolia voted for democracy and the market economy and we are very proud that the Americans regard us as an oasis of democracy. For us, the United States is not only our strategic third neighbour, but also the guiding North Star for our democratic journey.”  

During the visit, the US and Mongolia pledged closer economic engagement and the strengthening of cooperation in the areas of security, outer space and critical minerals, including rare earth elements (REEs). Amongst various other agreements, they entered into an "Open Skies" civil aviation accord, with direct Mongolia-US flights to commence next year.

Oyun-Erdene was set to follow up his visit to Washington with a tour of Nasa, while he also mentioned that he was planning another trip to the US, during which he intended to hold discussions with business magnate and investor Elon Musk in California. The discussions would likely focus on potential investment and collaboration opportunities with Tesla in the realm of electric vehicles (EVs) and Space X in space exploration.

Ulaanbaatar has already authorised Space X to provide internet services in Mongolia. Musk, meanwhile, has expressed an interest in facilitating a manned mission to Mars, and Mongolia wants to help.

Mongolia’s Gobi Desert has an environment very similar to that of Mars, with its ferrous, reddish soil and big temperature swings, from +45C during the day to -45C at night. Mars V, a Mongolian company, headed by Erdenebold Sukhbaatar, plans to build a Mars analogue training centre in the desert. It is hoped that cooperation with the Americans could make Mongolia an integral player in the space travel industry. The Mars analogue would be open to space programmes from around the world.

US Secretary of Defense Lloyd J. Austin III also met with the Mongolian PM for a discussion on security cooperation between the United States Army Pacific Command (USARPAC) and the Mongolian Armed Forces (MAF).

Last month, Mongolia hosted the Americans in a joint training exercise dubbed Khaan Quest. The MAF have also sent soldiers to international peacekeeping operations, in which they served alongside American soldiers in Iraq and Afghanistan. More military education and training, as well as equipment, will now be provided to MAF by the US.

Mongolia’s relationship with the United States is critical to Ulaanbaatar, given that the country is encircled by two big power neighbours, Russia and China. Generally, Mongolian people distrust China, while the older generation has a bit of nostalgia for the days of closer ties with Russia.

Economically, Mongolia is extremely dependent on China. That often makes it difficult for Mongolia to resist Beijing’s influence.

Historically, Mongolian leaders have managed to balance relations with Moscow with closeness to China, and vice versa, preserving their nation’s integrity. At the same time, Mongolia is always looking to strengthen relations with “third neighbours” such as the US, Japan, South Korea and India, as a way of offsetting Chinese and Russian influence.

Ulaanbaatar often refers to the US as an “important strategic third neighbour”. It signed a strategic partnership with Washington back in 2019.

The war in Ukraine has put Mongolia in a difficult position. With respect to relations with Beijing and Moscow, Mongolia and the Central Asian republics have not condemned the war. But the conflict has caused a marked shift across the region, away from Russia and towards China, as the former Soviet satellites do not wish to in anyway become regarded as a possible next point of Russian expansion.

While toeing the line between China and Moscow, Mongolia is also being careful not to damage its relationship with the US or other third neighbours. The meeting between Harris and Oyun-Erdene comes at a time when Mongolia wants and needs to intensify its third-neighbour relations, particularly with the United States.

On the US side, the meeting is fortuitous because Washington does not want China’s growing influence to squeeze the US out of Mongolia and the wider region. Furthermore, Mongolia is the perfect geographic location from which to monitor both Beijing and Moscow.

In June, the two countries signed a memorandum of understanding on securing reliable mineral supply chains. On the agenda this time was cooperation on rare earth minerals, which play a vital role in national security. Such critical raw materials (CRM) are required for the manufacturing of advanced weaponry, space applications and computer chips. They are also crucial to achieving climate goals as they are needed for the production of electric cars, wind turbines and solar panels.

Currently, China, which possesses 36% of the world’s rare earth minerals, controls over 70% of the world's REE extractive capacity, as well as 90% of processing capacity. Mongolia has 61.4mn tonnes of copper and 3.1mn tonnes of rare-earth minerals, access to which could decrease US rare-earth dependence on China.

Given that Mongolia is landlocked, it is difficult for the country to export anything by rail or road without Russia or China’s agreement. Seeking a mitigation strategy, a source at the US State Department told Reuters that the US was exploring “very creative ways” that would enable Mongolia to get its extracted rare earth minerals to world markets beyond Russia and China.

Oyun-Erdene also met with US Secretary of State Antony Blinken to discuss enhancing democratic values. Mongolia is often talked of as an island of democracy as Russia and China are, effectively, single-party autocracies, while the nearby Central Asian “Stans” have low-quality democracies.

Supporting democracy is talked of by diplomats as the essential path via which the US can forge closer ties to Mongolia. And for that democracy to be free and meaningful, the US must help Mongolia develop economically, so that it will be less beholden to Russia and China.