The two leaders have reportedly reached an agreement to pursue a railway joint venture. Russia has also agreed to continue training Mongolian military officers.

Nikolai Spassky, deputy head of the Russian nuclear agency Rosatom, signed a cooperation agreement with Sodnomyn Enhbat, head of the Mongolian Nuclear Energy Agency, which paves the way for a joint venture to develop uranium deposits and build a nuclear power plant in Mongolia.

Despite the Russian economy coming under increasing stress, the Kremlin is still pursuing a policy of handing out credits and other forms of assistance to foreign governments for political reasons, experts say.

Mongolia and Russia have always had close relations, so much so that during the Soviet era Ulaan Baatar was considered the capital of the 16th Soviet Republic.

Ties became somewhat looser after the collapse of the Soviet system, but remain strong. Russian companies are actively involved in Mongolia’s natural resource sectors, exploiting coal fields and precious metal deposits.

Russia is Mongolia’s top trading partner; two-way trade reached US$ 1.3 billion last year.

In 2003 the Kremlin forgave Mongolia’s debt to Russia, estimated at US$ 11 billion (about € 8 billion).