Mongolia has suffered ongoing setbacks to its economic advancement. This approach was in part embedded in a centralist policymaking culture. East asia and pacific region d i s c u s s i o n p a p e r s. In august 2015, governments united behind an ambitious agenda that.
This paper will assess whether the current mongolian armed forces 2015 transformation programs endstates meet the requirements of the third neighbor policy of mongolia. Mining policy failures i posted on june 2, 2015 by mendee mining policy is a good entry point to understand the overall policymaking processes of mongolia. Mongolias mining law to provide that the states share in mineral deposits of. In the project called the silk road economic belt and. Impact of the mining sector on the economy and budget revenue. Action plan of the mongolian government for 20162020. The mongolian government nominally established erdenes mongol in 2006 as a holding company to represent its interest in strategic mines, manage mineral licenses, and. Managing revenues from mining experience of mongolia.
Executive power is exercised by the president and the government. Negotiations drawn out over mongolias largest coal mine, 2015. Table 3 production of mining and extractive industry. On february 26th the president of mongolia pardoned 3 foreign nationals involved in the mining industry who had been convicted of tax evasion.
Underground mining methods room and pillar, open stoping, longwall mining, sublevel open stoping and block caving are used when the ore body is deep beneath the surface, and the ore grade is sufficient to cover the cost of mining at depth. East asia and pacific region the world bank washington, d. That said, the slightest change in investor sentiment towards either commodities andor chinas economic growth could provide a significant catalyst for the attraction of foreign direct investment into mongolias economy. The gom agreed with the international monetary funds imf extended fund facility. While the mine has been exporting copper concentrate since production began, there are plans to create industry within the country to manufacture finished products. For one, mining has been one of the dominant economic sectors of mongolia since the early 1900s. Having repealed the restrictive strategic entities foreign investment law sefil with the new investment law of october 20, which grants equal treatment to local and foreign investors. Second, with extensive mining activities, mining has caused numerous political and socioeconomic challenges for policymakers. The policy has a strong emphasis on adding value and downstream processing support, but lacks coverage on revenue management and investment issues. Mongolia s economy and mining industry, 2015 64% of overall fdi mining extraction, geosynoptics and heavy manufacturing 63% of industrial products from mining sector 18% of gdp around 40% of total government revenues from mining sector there are 3,871 valid licenses. The minerals and mining policy is not only a product of government. External demand is weakening due to a continued dampening of the commodity market and slower growth in china, translating into a drop in exports. Effects of ups and downs of the mongolian mining sector. Mining policy is a good entry point to understand the overall policymaking processes of mongolia.
In 2001 and 2002, the government attempted to accommodate asm by enacting interim regulations for this informal activity. The access to fossil fuels and raw minerals have given some measure of control over mongolian politics and makes government corruption all the more dangerous to the mongolian people. Mongolias economy and mining industry, 2015 64% of overall fdi mining extraction, geosynoptics and heavy manufacturing 63% of industrial products from mining sector 18% of gdp around 40% of total government revenues from mining sector there are 3,871 valid licenses. From natural resource boom to sustainable economic growth. Mongolian official language, kazakh in some parts of mongolia neighboring states. The priorities outlined in the 2015 mongolian energy policy are also disconnected from the international commitments on limiting climate change to 1. Examples of surface mining include coal, brown coal and bauxite mines. Foreign direct investment into mongolia christopher macdougall abstract. Apr 05, 2019 a group of mongolian legislators has recommended one of the agreements underpinning rio tintos oyu tolgoi copper mine should be scrapped and another changed, adding to the giant projects. Action program of the government of mongolia for 20162020 following the seventh regular state great khural parliament elections, the. A perfect storm of falling commodity prices and policy changes since may 2012 has taken its toll on mining investment, heightening fiscal pressure on the state to rebuild investor confidence. Mining operations in mongolia by approval year and industry classification. Jul 19, 2019 mongolia will vote in august to rip up parts of an investment agreement with rio tinto for the oyu tolgoi copper mine, which may force the miner to make concessions in a project beset by delays.
Its mining operations are a joint venture of rio tinto a ukbased mining transnational, ivanhoe mines of canada and the mongolian government. The oyu tolgoi project hijacked mongolian policy with its fiscal stabilization and. Timeline and coverage by ebrd policies and strategies for mining. The emergence of a set of global rules for best practice on sustainable. Department of state 2015 investment climate statement june 2015. Sustainable development goals, mining, mongolia, environmental impact assessment, health impact. State ownership and the development of natural resources in. Thus, work is underway to build a new rail route to russia and china. Once the reform is complete, mongolia will be able to start negotiating treaties with new potential partners and amending the old treaties. Support the export of meat and meat products by developing an effective mix of pasturebased and intensive livestock farming, increase export to 50. The government agency for policy coordination on state property and regulation holds and operates some soe mining assets, the mongolian stock exchange mse, the national air carrier miat, the mongol post office, and other properties.
Mar 12, 2015 the access to fossil fuels and raw minerals have given some measure of control over mongolian politics and makes government corruption all the more dangerous to the mongolian people. This volume is a product of the staff of the international bank for reconstruction and development the world bank. Legislative power is vested in both the government and parliament. With government committed to reform, the bank now targets governance in ongoing programs e. Mongolia executive summary this assessment was conducted by the sustainable development strategies group sdsg, with support from the ulaanbaatarbased sustainable development research centre sdrc, between august 2016 and february 2017. Implement programs such as state policy towards herders, mongolian herder and increase livestock. Mongolia lawmakers seek to rewrite oyu tolgoi deal reuters. For local communities, decent mining company jobs that are safe, stable and fairly compensated. Politics of mongolia takes place in a framework of a semipresidential representative democratic republic, and of a multiparty system. An assessment of erdenes mongol executive summary erdenes mongol is a multifaceted stateowned enterprise.
According to data from the mongolian national statistical office nso, real gdp grew at an average rate of 9 per cent annually over the past decade, peaking at 17. From humble beginning in the late 1970s, the policy shift in china from planned to market economy has led to economic. Elaborate recommendations to ensure the implementation of wildlifefriendly measures for new as well as for existing infrastructure i. Mongolia has worldclass deposits of copper, gold, coal and iron ore, and presents many present and future opportunities. Participation of the local government and community.
Accordingly, the policy outlines general principles aimed at encouraging the longterm sustainable development of the countrys mining industry, and provides for equal treatment. Pdf harnessing opportunities for good governance of health. This approach was in part embedded in a centralist policy making culture. Presented at the publicprivate dialogue 2015 workshop copenhagen, march 10, 2015 1 background and context mongolian national chamber of commerce mncci and industry has been acting as a major party to represent and deliver members voice to government, encourage businesses in nationwide and implement policy advocacy.
The governments may 2015 agreement with rio tinto to launch oyu tolgoi2. This paper uses a computable general equilibrium model to examine the shortterm effects on the mongolian economy of two scenarios. Lessons for mongolia prepared by pranav gupta, bin grace li, and jiangyan yu authorized for distribution by andrew berg, catherine pattillo, and koshy mathai april 2015. Monetary fund imf and world bank estimate that 2015 and 2016, depending on mongolian government policy decisions and the volatility of the price of mining commodities, may drop as low as 2 percent, with negative growth not impossible. Mining policy is a good entry point to understand the overall policy making processes of mongolia. Government accountability in mongolia is generally quite low. International workshop on implementing wildlifefriendly. Mongolian peoples party to introduce investor, miner. Erdenet mining corporation is a joint venture between the governments of mongolia and russia and was established in 1976. The government of mongolia gom in collaboration with national and international organizations deals with air pollution and consequent problems in a. Stimulating direct local employment executive summary when a mining company arrives in an area, the promise of local employment is central to public debate in leastdeveloped, developing and developed countries alike. Foreign and domestic businesses report no problems converting or transferring investment funds, profits and revenues, loan repayments, or lease payments into whatever currency they wish aside from occasional, marketdriven shortages of foreign reserves. The mongolian government employs a liberal regime for controlling foreign exchange. The policy acknowledges that the minerals sector should be the main driver of mongolias broader economic development.
From natural resource boom to sustainable economic. This report summarizes our assessment of the mining law and. Both the international monetary fund imf and world bank estimate that 2015 and 2016, depending on mongolian government policy decisions and the volatility of the price of mining. Rio tinto and the government of mongolia are sorely needed. Government of mongolia is currently working to reform its domestic tax laws and treaty policy. Mongolian mining projects report 2015 this report is a guide for australian mining equipment, technology and services mets exporters considering doing business in mongolia. Yet, despite the policy reforms, the gom was unable to prevent and avoid an economic crisis. Subnational ppd council in mongolia publicprivate dialogue. Mongolia will vote in august to rip up parts of an investment agreement with rio tinto for the oyu tolgoi copper mine, which may force the miner to make concessions in a project beset by delays. Mongolia has also joined the international budget partnership 2005, the extractive industries transparency initiative 2006 and the open government partnership 20 while establishing a chapter of the. International prices of mining commodities have been highly volatile in recent years. Our work shows how mining operations lead to pollution and displacement for local herders and exacerbate water scarcity issues. In the last few years, the government of mongolia gom has implemented economic remedy policies and borrowed a considerable amount from abroad in the form of bonds. At this time of economic and financial difficulties, the main objective of the government of mongolia is to revitalize the economy within a short period of time, promote growth, support social sectors and drastically improve the wellbeing of its citizens.
Mongoliachinarussia economic corridor infrastructure. Law in transition 2016 publication european bank for. While the primary target audience are mongolian stakeholders, this training manual can also be used by. With huge amounts of unexploited natural resources gold, copper, coal and more the mongolian economy is estimated to grow massively in the years to come. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the execu. A group of mongolian legislators has recommended one of the agreements underpinning rio tintos oyu tolgoi copper mine should be scrapped and another changed, adding to the giant projects. Mongolia has since introduced a number of positive changes to mining and investment legislation.
It has, therefore, been accorded the highest priority. Petroleum 2014, the general administrative law 2015, the law on public hearing 2015, and the law on debt management 2015. The judiciary is independent of the executive and the legislature. Some resourcerich developing countries are in the process of harnessing immense mining. The government of mongolia gom in collaboration with national and international organizations deals with air pollution and consequent problems in a number of ways including adoption of law and. Pdf a study on air pollution in ulaanbaatar city, mongolia.
The government will pursue the policy to continuously expand the. Policies governing extractives are unstable and have been hampered by a lack of policy coordination. Rio tinto under fire as mongolia presses for mine deal. Mongolian governments pursued policies that greatly reduced the role of the government. This has included a renewed investment law, a new mining law and policy, and new. Since 2015 some of these assets have been auctioned off. Economic slowdowns among mongolias key regional export partners, particularly china, coupled with government policy missteps have inhibited the sectors shortterm prospects, but there is still strong medium to longterm potential for u. Mongolia has long relied on the exploitation of its vast mineral resources, which include coal, copper and gold, for economic development. As of 2007 erdenet was accounted for 14% of mongolias gross domestic product gdp. Mongolian herders, who have developed strategies for. Mnt billions 20092015 table 4 mining licenses granted december, 2015 14 table 5 information of mining licenses and areas by province 15 table 6 production and exports of the mining sector 2014 and 2015 16. Moran qualitatively evaluated the effects of the mongolian mining boom on water, infrastructure, environment, income inequality, corruption, transparency, stability, and traditional agriculture and provides guidelines for the government to consider in order to reduce the negative effects of mining development.
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