'Every day, more come to see,' a lady working in Central Tower's lobby says.

Mongolian Mining Corporation (MMC), the nation's biggest exporter of coking coal, raised US$651 million in a Hong Kong initial public offering in October. It was the first Mongolian-owned company to float in Hong Kong and around 1 per cent of the shares were bought by Mongolian nationals, who will have done well. MMC's stock had risen 25 per cent above the HK$7.02 offering price.

But Battsengel, a 38-year-old, smiley big-boned chemistry PhD in a well tailored suit, cannot get the IPO proceeds back into his country. The aim, he says, is 'to spend every single cent' in Mongolia.

That, however, would be a problem. Mongolia could not absorb MMC's US$651 million without creating hyperinflation and causing the currency to rise to the point where exporters collapsed.

While the nation has mind boggling natural resources, including the world's second-biggest copper deposits and eleventh-largest coal deposits, they are mostly untapped and the economy is tiny.

Mongolia achieved GDP of US$4.2 billion in 2009, or half that of Papua New Guinea.

'Every one is concerned about this Dutch disease,' Battsengel says. (That is a term economists coined in reference to a massive natural gas discovery in the Netherlands in the 1960s, where the resulting currency appreciation and inflation caused economic mayhem, and which has entered popular usage in Mongolia.)

So, Battsengel says, the bulk of MMC's IPO funds will stay offshore, for now. 'We are part of this country and have responsibilities,' Battsengel says. 'So we need to manage [repatriation] in a proper way that won't hurt the country.'

The scene outside Battsengel's office window highlights Mongolia's yawning wealth gap. The city is a depressing mix of Soviet-style high rises and shanty towns full of nomads' yurts, but Ulan Bator's potholed roads are filling up with new Mercedes and Hummers.

Over a third of Mongolia's 2.8 million people live on less than US$1 a day. But Battsengel, as a coal miner, cannot really do anything about his country's social problems.

MMC says it will spend the lion's share of its IPO proceeds extending its coking coal mine, which is already profitable and sits in the south Gobi desert, 240 kilometres from the Chinese border.

Battsengel admits much of the cash, apart from miners' wages, will go to foreign companies. Mongolian firms do not make much specialist mine equipment, while the country lacks expert geologists and engineers.

'Some funds will be spent abroad. We will be importing equipment from the US, Australia, China.'

But [staff] are paid here so money is paid here [in wages], he adds.

The proximity of MMC's coking coal mine, named UHG, to coal-hungry China is an economic blessing and, potentially, a political curse.

Mongolia only has one rail line, which is part of the Trans Siberian route running from Ulan Ude in Russia to Beijing, and does not go anywhere near UHG.

MMC plans to build its own rail line to China, in a move that Battsengel says would at least halve its costs of transporting coal to its mainland customers from a current US$20 per tonne. But it is awaiting final approval from the Mongolian government, which, for political reasons, is causing delays.

In June, the government announced plans to develop new rail lines across the country in three phases. It specified the rail line MMC wants to build should be the second phase of railway construction.

The first phase of rail development will be a line from Tavan Tolgoi, the coal-rich area where MMC's deposit is based, to Russia. The government also ruled that all new trains would run on Russian gauges, rather than those used in China.

The government is determined that the nation, which already sends around 70 per cent of its exports to China, will not turn into Beijing's quarry or become influenced by Chinese politics. To that end, it wants to involve neighbouring Russia as much as possible as it opens its mining industry.

The pro-Russia rail policy is potentially a problem for MMC, as most of its customers are Chinese.

All Battsengel can say at this point is that 'we are still waiting for finalisation on timing'. MMC's well connected chairman, Odjargal Jambalmants, might be able to speed things up. The coal miner is majority-owned by MCS Group, a sprawling Mongolian conglomerate which Odjargal founded in 1993, when he was just 27.

MCS has stretched its tentacles as widely as possible in sparsely populated Mongolia. As well as operating mines, it distributes Coca-Cola beverages and Tiger beer and develops real estate.

Odjargal's friends reckon the 'minigarch', as Mongolians jokingly call their small group of wealthy businessman in reference to neighbouring Russia's far richer class of billionaire oligarchs, has enough political patronage to speed up permission for his railway.

Battsengel left Mongolia aged 17 to study in Bratislava, Slovakia, gaining a PhD there and then moving to the University of Cologne, Germany, to do post-doctoral chemistry research. He returned to Mongolia in 2003 and immediately joined MCS, starting out as head of quality assurance at the conglomerate's Coca-Cola joint venture.

Mongolia, he says, has improved exponentially since he left to study abroad. When Battsengel left, the country was on its knees. Mongolia gained independence from Russia in 1991 when the Soviet Union collapsed.

That meant Russia, which Mongolia had relied on as a source of money and imported food, stopped sending both. The country has depended heavily on financial aid from foreign governments and multilateral agencies since.

Odjargal was one of the first local businessman to develop a private import industry to replace the lost Soviet handouts.

MCS Group began as Mongolia's first energy consultancy, before the company branched out into consumer industries and real estate, backed partly by multilaterals such as the European Bank of Reconstruction and Development.

When asked if he would have rather MMC floated on the Mongolian stock market instead of in Hong Kong, Battsengel sighs and looks a bit glum. The question is somewhat unfair, because a US$651 million IPO in Mongolia would be impossible.

Mongolia's stock exchange, which is housed in a bright pink, former childrens' cinema and open for dealing just one hour a day, only achieves trading volumes of around US$100,000 a day.

Battsengel, though, says he hopes Mongolia can develop a large, mining-focused stock exchange. That may not happen until ordinary Mongolians became rich enough to buy shares.

Battsengel insists that Mongolia's government, not its mining companies, must deal with the country's inequalities. He says Mongolian miners who raise cash offshore will not be able to put it in domestic banks until the government has, somehow, grown the economy big enough to absorb the cash.

'One solution is to grow the economy big as fast as possible, and not be entirely dependent on mining,' Battsengel argues. 'This money should be absorbed here in this country, so different sectors of the economy must grow. Agriculture is a possibility,' he says, adding the country could become a wheat exporter.

'Two-three years ago, Mongolia was fully dependent on importing grain but now it is almost self-sufficient. The next sector may be tourism. Everyone [who visits] is amazed at the beauty of this country and its nature.'

This could all take quite some time. Mongolia's harsh climate can see temperatures fall to minus 45 Celsius in winter, which does not make it a natural food production centre.

And despite Mongolia's incredible natural beauty, the government lacks marketing skills.

In an attempt to encourage tourism, the government proclaimed 2003 'Visit Mongolia year'. But the campaign's advertisements were only displayed inside Mongolia.

Battsengel suggests the government could grow the economy by selling foreign currency bonds and spending the proceeds on badly needed roads, railways and airstrips.

Mongolia's parliament has authorised the government to sell foreign currency bonds. But the plan has been criticised by the International Monetary Fund, which warned that Mongolian politicians lack the skills and experience to manage commercial debt.

Battsengel seems genuinely sad at the prospect of his country's mineral wealth staying outside of Mongolia's borders, and enriching only a lucky few.

'Yes, we will generate revenues, but then its up to other Mongolian companies to grow, to build roads, airports, hotels,' he says.

He is, after all, a mining boss and not an economic planner. Still, it remains likely that Ulan Bator will have many more designer boutiques before McDonald's arrives.

Riches out of reach

MMC's IPO proceeds would cause hyperinflation if returned to Mongolia

The amount MMC raised, in US dollars, in its Hong Kong initial public offering: $651m