Russia sees no threat to deals in new Mongolia leader

Mongolia's President Tsakhiagiin Elbegdorj places his hand on the Constitutions as he takes an oath during the inauguration ceremony in Ulan Bator, Mongolia June 18, 2009.

MOSCOW (Reuters) - Russia is confident planned investments in Mongolia's uranium fields and rail network will not be undermined by the country's new leadership, a Kremlin official said ahead of the Russian president's visit this week.

President Dmitry Medvedev will discuss military cooperation and investment in uranium on the two-day visit to Ulan Bator, which is scheduled to begin on Tuesday, chief Kremlin foreign policy aide Sergei Prikhodko told reporters on Sunday.

Tsakhiagiin Elbegdorj won Mongolia's presidency in May on a promise to ensure that voters benefit more from the country's mineral wealth, prompting fears among foreign investors that earlier deals might be revised.

"There was speculation around the new president ... But we have not felt any fundamental changes in the approach to strategic cooperation with Russia," Prikhodko said.

"We feel the new leadership of Mongolia is disposed to preserving everything that has been achieved in recent years."

Russia's state rail monopoly in May signed a deal potentially totaling $7 billion to upgrade Mongolia's rail network and improve access to untapped deposits of uranium, coal and other minerals in the Gobi desert.

Mongolia has also offered Russia access to its uranium deposits as the Kremlin seeks to position itself as a major supplier to the growing nuclear fuel industry.

Medvedev will be accompanied by the heads of Russian state companies Russian Railways, Russian Technologies and Rosatom, the state nuclear corporation.

"Dialogue is continuing on establishing cooperation with Mongolia via state corporation Rosatom in the areas of exploration, extraction and processing of uranium ore," Prikhodko said.

Moscow has been trying to break into the prosperous nuclear markets of the United States and the European Union, and has been eyeing possible alliances in the world market.

Russia holds more than 10 percent of the world's uranium reserves. It is also among the world's biggest providers of enrichment services and has ventured abroad to seek additional raw materials.

The planned railway upgrade aims to improve access to Tavan Tolgoi, where estimated coal reserves of 6.5 billion tonnes rank it as the world's largest untapped deposit of the type of coal used by steel makers in their blast furnaces.

Russian companies have expressed interest in helping to develop the deposit.

(Writing by Conor Humphries; editing by Ralph Boulton)