US vice president visits coal-rich Mongolia

US Vice President Joe Biden arrived in Mongolia Monday for talks with the leaders of China's resource-rich neighbour, which is opening up its vast coal reserves to foreign investors. Biden left China after a five-day visit aimed at shoring up the reputation of the United States' beleaguered economy and flew to the Mongolian capital Ulan Bator, where he will meet the president and prime minister. The vice president is the most US senior leader to visit Mongolia since 2005, when then president George W. Bush made a brief stopover in the capital. Sandwiched between China and Russia, Mongolia has traditionally pursued a careful foreign policy that seeks not to alienate its giant neighbours. But the young democracy has also sought closer ties with the United States and sent troops to both Iraq and Afghanistan. Mongolia is opening up its vast coal reserves to foreign investors, hoping to stimulate growth and pull thousands of people out of poverty in the mineral-rich but still underdeveloped Asian country. Last month US mining giant Peabody Energy said it was among the firms chosen to help develop a section of the highly coveted Tavan Tolgoi coal mine in the Gobi desert, although later reports said the deal was still under negotiation. Tavan Tolgoi is one of the world's largest coal fields with 6.4 billion tonnes of reserves, and competition for the government contracts to develop it has been intense. In June, President Elbegdorj promised to give US companies a role in its booming energy sector during talks in Washington with President Barack Obama. The United States said Biden's visit -- the second leg of an Asia tour that will also take in key US ally Japan -- was a "strong expression of support for Mongolia?s growing democracy". "Mongolia has been working with us on a raft of important issues -- non-proliferation, peacekeeping, on human rights," said a statement on the website of the US embassy in Ulan Bator. "On the defence and security side, Mongolia is making substantial contributions of troops to the operations both in Iraq and Afghanistan. So there is a lot of good work and a lot to talk about." Biden used his China visit to reassure Beijing that the world's biggest economy would never default on its debts following a historic downgrade this month of the country's top-notch credit rating. China is the largest foreign holder of US debt, and Biden used the official visit -- his first as vice president -- to assure its leaders that their massive investment remained safe. Beijing has used the proceeds of its export machine to invest around $1.17 trillion in US Treasury bonds, and the world's second-largest economy last week appealed for global financial stability as panic gripped the markets. But the country's leaders were conciliatory in their public appearances with Biden, with Premier Wen Jiabao saying his "clear message" had served to boost investor confidence in the United States. The US vice president will attend a demonstration of traditional Mongolian sports -- likely to include archery, wrestling and horse racing, according to his aides -- before flying on to Japan later Monday