Policies governing extractives are unstable and have been hampered by a lack of policy coordination. Elaborate recommendations to ensure the implementation of wildlifefriendly measures for new as well as for existing infrastructure i. Negotiations drawn out over mongolias largest coal mine, 2015. Managing revenues from mining experience of mongolia.
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. Second, with extensive mining activities, mining has caused numerous political and socioeconomic challenges for policymakers. Having repealed the restrictive strategic entities foreign investment law sefil with the new investment law of october 20, which grants equal treatment to local and foreign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. Mining operations in mongolia by approval year and industry classification. The government of mongolia gom in collaboration with national and international organizations deals with air pollution and consequent problems in a. The government will pursue the policy to continuously expand the. Once the reform is complete, mongolia will be able to start negotiating treaties with new potential partners and amending the old treaties. Mongoliachinarussia economic corridor infrastructure.
Mongolia has since introduced a number of positive changes to mining and investment legislation. Foreign direct investment into mongolia christopher macdougall abstract. This approach was in part embedded in a centralist policymaking culture. Thus, work is underway to build a new rail route to russia and china. Support the export of meat and meat products by developing an effective mix of pasturebased and intensive livestock farming, increase export to 50. 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. Politics of mongolia takes place in a framework of a semipresidential representative democratic republic, and of a multiparty system. This paper will assess whether the current mongolian armed forces 2015 transformation programs endstates meet the requirements of the third neighbor policy of mongolia.
Petroleum 2014, the general administrative law 2015, the law on public hearing 2015, and the law on debt management 2015. For local communities, decent mining company jobs that are safe, stable and fairly compensated. The mongolian government nominally established erdenes mongol in 2006 as a holding company to represent its interest in strategic mines, manage mineral licenses, and. This approach was in part embedded in a centralist policy making culture. 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. The mongolian government employs a liberal regime for controlling foreign exchange. 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.
Yet, despite the policy reforms, the gom was unable to prevent and avoid an economic crisis. Mongolian peoples party to introduce investor, miner. While the primary target audience are mongolian stakeholders, this training manual can also be used by. 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. 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. 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 policy has a strong emphasis on adding value and downstream processing support, but lacks coverage on revenue management and investment issues. Mining policy is a good entry point to understand the overall policymaking processes of mongolia. From natural resource boom to sustainable economic growth. 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. The oyu tolgoi project hijacked mongolian policy with its fiscal stabilization and.
This report summarizes our assessment of the mining law and. The judiciary is independent of the executive and the legislature. 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. Subnational ppd council in mongolia publicprivate dialogue. In 2001 and 2002, the government attempted to accommodate asm by enacting interim regulations for this informal activity. 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. Erdenet mining corporation is a joint venture between the governments of mongolia and russia and was established in 1976. Mongolian official language, kazakh in some parts of mongolia neighboring states. The gom agreed with the international monetary funds imf extended fund facility. 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. State ownership and the development of natural resources in. 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.
This paper uses a computable general equilibrium model to examine the shortterm effects on the mongolian economy of two scenarios. This has included a renewed investment law, a new mining law and policy, and new. Timeline and coverage by ebrd policies and strategies for mining. It has, therefore, been accorded the highest priority. While the mine has been exporting copper concentrate since production began, there are plans to create industry within the country to manufacture finished products. Its mining operations are a joint venture of rio tinto a ukbased mining transnational, ivanhoe mines of canada and the mongolian government. Law in transition 2016 publication european bank for.
Pdf harnessing opportunities for good governance of health. 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. 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. An assessment of erdenes mongol executive summary erdenes mongol is a multifaceted stateowned enterprise. 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. Impact of the mining sector on the economy and budget revenue. 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. Government of mongolia is currently working to reform its domestic tax laws and treaty policy. In the project called the silk road economic belt and. The minerals and mining policy is not only a product of government. East asia and pacific region the world bank washington, d. East asia and pacific region d i s c u s s i o n p a p e r s. Our work shows how mining operations lead to pollution and displacement for local herders and exacerbate water scarcity issues.
From humble beginning in the late 1970s, the policy shift in china from planned to market economy has led to economic. Accordingly, the policy outlines general principles aimed at encouraging the longterm sustainable development of the countrys mining industry, and provides for equal treatment. Mongolias mining law to provide that the states share in mineral deposits of. Mongolia has suffered ongoing setbacks to its economic advancement. The policy acknowledges that the minerals sector should be the main driver of mongolias broader economic development.
This volume is a product of the staff of the international bank for reconstruction and development the world bank. Executive power is exercised by the president and the government. 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. 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. 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. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the execu. International workshop on implementing wildlifefriendly. Since 2015 some of these assets have been auctioned off. Mongolian mining projects report 2015 this report is a guide for australian mining equipment, technology and services mets exporters considering doing business in mongolia. 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. 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.
Mongolia lawmakers seek to rewrite oyu tolgoi deal reuters. Department of state 2015 investment climate statement june 2015. External demand is weakening due to a continued dampening of the commodity market and slower growth in china, translating into a drop in exports. From natural resource boom to sustainable economic. Mongolian governments pursued policies that greatly reduced the role of the government. Mongolian herders, who have developed strategies for. 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. Rio tinto and the government of mongolia are sorely needed. International prices of mining commodities have been highly volatile in recent years. Action plan of the mongolian government for 20162020.
Examples of surface mining include coal, brown coal and bauxite mines. The governments may 2015 agreement with rio tinto to launch oyu tolgoi2. Mongolia has long relied on the exploitation of its vast mineral resources, which include coal, copper and gold, for economic development. Mining policy is a good entry point to understand the overall policy making processes of mongolia. 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. Some resourcerich developing countries are in the process of harnessing immense mining. 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. With government committed to reform, the bank now targets governance in ongoing programs e. Implement programs such as state policy towards herders, mongolian herder and increase livestock. For one, mining has been one of the dominant economic sectors of mongolia since the early 1900s. Legislative power is vested in both the government and parliament. Action program of the government of mongolia for 20162020 following the seventh regular state great khural parliament elections, the. Participation of the local government and community.
Rio tinto under fire as mongolia presses for mine deal. 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. Effects of ups and downs of the mongolian mining sector. 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. The emergence of a set of global rules for best practice on sustainable. 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. As of 2007 erdenet was accounted for 14% of mongolias gross domestic product gdp. In august 2015, governments united behind an ambitious agenda that. Sustainable development goals, mining, mongolia, environmental impact assessment, health impact. The priorities outlined in the 2015 mongolian energy policy are also disconnected from the international commitments on limiting climate change to 1.
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