Mining News

Mongolia changes mining laws

Posted by Cheryl Rutledge on 7/8/2014 3:46:56 PM

By Kenneth P. Green

Writing in Bloomberg News, Michael Kohn reports that Mongolia has changed its mining laws in order to make the country more hospitable to mining investment:

Mongolia’s parliament yesterday approved changes to the nation’s 2006 Minerals Law, a development that may spur renewed investment in the flagging economy.

Passage of the amendments was announced on the Great Hural’s website. The legislature, which ended its spring session today, also passed a new law on energy to help expand that sector.

Kohn quotes mining Vice Minister Erdenebulgan Oyun, as explaining that:

Mining law amendments will increase the proportion of Mongolia’s area available to mining and exploration to 20 percent from about 8 percent, by lifting a 2010 ban on new licenses…The period of exploration will also increase to 12 years from nine years, he said.

According to the article, Dale Choi, the head of an Independent Mongolian Metals and Mining Research consultancy greeted the changes with optimism: “Uncertainty that has been hanging over the mining and exploration sector for quite some time has been finally resolved with minimal amendments.

Mongolia’s steps could help improve their hospitality to mining investment significantly, based on findings from the Fraser Institute’s Annual Survey of Mining Companies. In the 2013 edition, Mongolia rated 13th from the bottom in the overall policy perception index (out of 112 jurisdictions), which captures the broadest impressions of investment hospitality in mining jurisdictions around the world. With regard to uncertainties about protected areas specifically, Mongolia had a higher percentage of respondents say that such uncertainty would deter investment to some extent. Mongolia ranked 82/112 on that question.

Mining is a long-term economic activity that relies on high levels of certainty in order to justify mining investment. Mongolia’s steps to reduce uncertainty regarding which lands will be open to mining could help them improve their attractiveness to mining investment.




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