On horseback, motorbike and foot, Mongolians headed to the polls Sunday to elect a new president whom residents and investors alike hope will facilitate the windswept country's efforts to tap its vast mineral wealth.

The tight race between incumbent Nambariin Enkhbayar of the ruling Mongolian People's Revolutionary Party (MPRP) and opposition Democratic Party (DP) candidate Tsakhiagiin Elbegdorj is seen as a barometer of how soon the country will be able to reach a deal with foreign investors on a landmark mining deal.

Any repeat of the type of unrest and ensuing legal struggles that followed last year's parliamentary elections, in which five died, could postpone approval of a landmark draft investment agreement on developing the Oyu Tolgoi copper and gold project, seen as a template for future deals.

Coming at a time when the young Central Asian democracy has been hit hard by falling mineral prices, the election pits Elbegdorj's promises of change and fighting corruption against Enkhbayar's pledge to beef up the rule of law. Both promise some sort of payout from mining revenues.

Stability is the most important thing to me, said Sandagyn Bayarmaa, 46, who like much of the population, herds goats and sheep on the country's rolling grasslands and lives in a round felt tent.

The windswept countryside is the traditional base of support for the MPRP, the reincarnation of the party that ran Mongolia as a Soviet satellite through much of the last century, while Elbegdorj draws largely on voters in the capital, Ulan Bator.

Polling stations opened at 2300 GMT Saturday and are due to close at 1400 GMT Sunday. The latest survey put them in a statistical tie.

Mongolia, whose empire under Genghis Khan once extended west as far as Hungary, now faces the imperative of uniting on what terms it can accept in working with foreign miners to develop the deposits of copper, gold, uranium, lead, zinc, and coal that it hopes will pull its nearly 3 million people out of poverty.

Negotiations over the $3 billion Oyu Tolgoi project, set to be developed by Ivanhoe Mines and Rio Tinto, have dragged on for years, as the government seeks to formulate it as a model for obtaining sufficient revenue from its mineral resources in future.

Sealing the deal quickly is now widely seen as increasingly important if Mongolia hopes to realize its ambitions of becoming a mining powerhouse and take advantage of the next upturn in commodity prices. (Editing by Valerie Lee)

Deals