Oliver Belfitt-Nash in Ulaanbaatar -

Mongolia's natural resource wealth has been the fuel that has provided it with the fastest growing economy in the world. But the main risk for companies developing and exporting these commodities lies in the severe lack of infrastructure, and some are suffering as a result.

Mongolia, whose GDP grew at a staggering 31.4% for the first three quarters of this year, is known for its endless rolling steppes and is the least densely populated nation in the world, making transporting goods a capital-intensive endeavour. "Infrastructure is a serious problem here," says Fiezullah Saidov, president of Monet Capital, a local investment bank. "Valuable assets are made uneconomical simply by the distance to market. There's only far you can truck coal on a dirt road."

Multinationals like Ivanhoe Mines and Mongolian Mining Corporation have the cash to build their own roads and railways.

Ivanhoe and Rio Tinto, which are developing the world's largest undeveloped copper-gold resource Oyu Tolgoi, is along with project manager Fluor Corporation building paved roads to China and Russia, a power transmission line to China, a 75-kilometre pipe to supply water and an airport large enough to accomodate Boeing 737s for when the project starts commercial production in 2013.

Mongolian Mining Corporation on October 7 announced the completion and successful commission of its 245-km paved road to the Gashuun Sukhait border. This two-lane heavy haul coal transport road will ferry 2,000 trucks per day to supply 28m tonnes of coal down to China. It is the first major advancement in alleviating Mongolia's infrastructure bottleneck.

Mongolia is also planning to construct 5,684-km of rail line over the next decade, and the construction specifics have become a political as well as economical issue. A line has been proposed to the north rather than south to the Chinese border in order to open up Mongolian exports to the eastern seaboard and diversify exports away from China.

Despite these plans, companies such as Aspire Mining are suffering. Situated in the north-western part of the country, away from China, Aspire is developing a project with over 300m tonnes of one of the highest quality premium coking coals around with vitrinite levels of 96-97%. Even though the government has planned a railway for the area, Aspire's share price has fallen 23.5% so far this year and 67.6% since its peak hit in April due to a delay in the railway's construction. Unlike Mongolian Mining, Aspire has no funds to build the $1.7bn rail line on its own and must rely on either the government or a large international player to get involved. The future of the company rests on this issue.

Earlier this year, the World Bank approved an investment credit of $25m for the Mining Infrastructure Investment Support Project (MINIS), which is aimed at developing the required studies and resources to support the mining sector. "These [studies] will help ensure that investments in infrastructure are financed wisely and that their potential environmental and social impacts are also taken into account," says Coralie Gevers, country manager for the World Bank in Mongolia.

In the government's 2012 budget, 23.1%, or around $1.3bn, has been allocated for development, much of which will go into infrastructure. With this, analysts expect some smaller miners to emerge from the woodwork and begin production.