ULAN BATOR, Mongolia - Mongolia's generally pro-business Democratic Party is forming a coalition government with smaller populist parties, raising concerns about policy changes for foreign companies eager to join the country's mining boom.
Three weeks after legislative elections, the Democratic Party announced late Thursday that days of bargaining yielded an agreement with a group of smaller parties. The coalition will combine the 31 seats the Democrats won with the other parties' 13 seats, giving the group 44 of the parliament's 76 seats.
The election was largely fought over how to spread Mongolia's mineral wealth, which fueled a 17 per cent economic growth rate last year and has attracted global mining firms to the remote, still-poor country sandwiched between Russia and China.
Near the top of the new government's agenda will be deciding which foreign companies will take part in developing the massive Tavan Tolgoi coal field, which lies 200 kilometres (120 miles) from energy-hungry China. U.S., South Korean, Japanese as well as Russian and Chinese companies have expressed interest in the project.
While the Democrats will be the coalition's biggest voice, the agreement is a victory for former President Enkhbayar Nambar. Though he was barred from running because he faces corruption charges, Enkhbayar's splinter Mongolian People's Revolutionary Party and an affiliate group provided 11 seats and gave the Democrats a majority.
Enkhbayar's party platform called for better terms for Mongolia with foreign investors on the large-scale mining projects.
Under the coalition agreement, the parties have agreed to work together through 2016 and co-operate in next year's presidential election. Incumbent President Elbegdorj Tsakhia, a Democrat, is expected to run for re-election.
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