Economics is the key area of the Russian-Mongolian relationship, Medvedev said at a news conference after the talks with his Mongolian counterpart Elbegdorj Tsakhia on Tuesday.

Trade between the two countries has dropped by four fifths since the collapse of the Soviet Union.

Russia wrote off 98 per cent of the money it was owed by Mongolia six years ago, and is now asking for the rest to be settled.

The visit is seen as a way of off-setting Mongolia’s increasing co-operation with China.

“The fact that Mongolia is developing relations with other states – we welcome that,” said Medvedev. “It contributes to regional stability. But we should not just rest on our laurels. Our relations in various business areas are developing fine, but that doesn’t mean we should relax and do nothing.”

The Russian leader expressed confidence that “the documents that were signed on Tuesday will supplement the existing cooperation”. This concerns “the mining industry, transport infrastructure, agriculture and, of course, Erdenet Mining Corporation and Mongolrostsvetmet gold mining company are key players here,” he said.

The countries are co-operating in the development of Mongolia’s transport infrastructure and in exploring the Dornod uranium deposit.

“Border and interregional cooperation that accounts for over 70 per cent of the trade turnover has also deepened,” the Russian President noted. He also added that there military and technical cooperation is also developing between Russia and Mongolia.