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MINISTRY OF MINING

Mission:

• By the reliance natural resource fund of Mongolia and

introduction of advanced safety technologies develop

responsible and transparent mining practices through the

implementation of policies, regulations and procedures

encouraging environmentally friendly, healthy and socially

acceptable mining operations and fostering law enforcement

to mutual benefit.

• To improve long –term livelihood security and the quality of

life, to accelerate socio- economic development, and to

promote competitive and sustainable growth through

creating and supporting value added production.

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2006 2007 2008 2009 2010 2011 2012

Total 673.40 996.00 1,053.1 704.50 1,233.7 4,468.1 4,968.2

Miningsector

221.80 447.10 526.30 329.90 629.00 2,088.6 2,049.7

673.40

4,468.10 4,968.20

221.80

2,0

49.7

0

-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

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Tax revenues generated by mining industry to the state budget was 2,049 trillion

MNT or accounted for about 41.3% of total state generated revenues.

(billion MNT)

INVESTMENT AND PRODUCTION

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112 163 183

819

4083 4100

260 324

791

3154

3651 3654

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Investment (million USD)

Production

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Oil exploration reached 14 483 138 barrel that generated 332,3 billion MNT

to the State Budget.

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10607.3 13326.4

25253.1

32994

31139.1

5123 7550.5

18241

22526 20500

COAL EXPORT (2008-2012)

Coal exploration of Mongolia (thousand ton)

Coal export (thousand ton)

2008

2009 2010

2011 2012

FROM EXPLORATION TO UTILIZATION

1091 1085 1,158 1,198 1,237 1,253

4111 3659

2,979 2,572

2,303 2,239

5202

3,492

0

1000

2000

3000

4000

5000

2008.XII.31 2009.XII.31 2010.XII.31 2011.XII.31 2012.XII.31 2013.III.01

Number of licenses, 2008-2013

49.0

19.1 0.40 0.88

49.4

20.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2008.XII.31 2009.XII.31 2010.XII.31 2011.XII.31 2012.XII.31 2013.III.01

Licensed area, million hectares, 2008-2013

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Utilization

Exploration

Total

Utilization

Exploration

Total

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Laws passed by Parliament of Mongolia:

• Law of Mongolia on Licenses of Business Activities is amended on 7 February’

2013;

• Law of Mongolia on Petroleum Products is amended on 7 February, 2013:

The main points of the amendment are import, wholesale and retail of

petroleum product licenses must be obtained separately. Also, it identified

the reserve of petroleum products.

• Law on Control on Turnover of Explosive Substances Blasting Tools is

amended and adopted on 31 January, 2013.

Added an article that a Mongolian citizen or an entity must own at least

51% of Explosive Substances Blasting Tools manufacturing industry.

Added an article that an entity whom involving on turnover of explosive

substances blasting tools must do operational risk insurance, and life and

health insurance.

Mongolian Policy on Mineral Resources

• By Order #3 of the President of Mongolia, dated on 7 March’ 2013, established a

working group to develop “National Policy on Mineral Resource” headed by

Mr.D.Gankhuyag, Minister of Mining.

After approval of the Policy, it will provide a clear understanding of the global and

regional market trends, medium and long -term policy for the mineral resource sector,

and Policy implementation programs, projects and measurements.

Draft of New Mineral law:

• Duties and responsibilities of a licensed owner,

• Responsibility towards environmental rehabilitation and restoration,

• Encourages national company participation to own a license of mineral resource,

• Improve the interrelationships between national and local Agencies.

• The changes are intended to also improve occupational safety aspects in mining

sector and environment protection.

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Updated draft version of the Law of Mongolia on Petroleum Products includes

the following new points:

• Clarification of the local community participation,

• An independent auditor must conduct monitoring of compensation expenses ,

• Promote domestic companies ,

• Clarification of duties and rights of State agencies,

• Apply royalty fees for all product share agreements and allocate some portion to

the local community

The approval of the law will increase income contribution to the national economy and

state budget.

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•Increase the state budget allocation for the geological exploration

and completion of 1:50,000 – scale geologic map covering 40%

of the territory by 2016.

• Increase state mineral resource, conduct state natural resource

assessment, determining minerals occurrences and location

concept basis of a scientific study of the geological structure and

strengthen Geological industry in Mongolia.

• Develop “Classification of hard mineral deposit and natural

resource of Mongolia” in accordance with internationally

standards and become a member country of the Committee for

Mineral Reserves.

•Improve legal environment of initial public offers, issuance of

shares and evaluation of projects and mineral deposits.

Government will be responsible to include some deposits into the strategic mineral

deposits list and determine government share on them by Minerals law of the 2016.

By the Parliament resolution #27, 2007: 15 deposits added to the strategic mineral

deposits list and approved the 39 deposits list for a later solution.

Was not done an economic assessment and determining a government ownership share

for other deposits except Oyu tolgoi and Tavantolgoi.

The new government made the resolution #100 for the following purposes: - develop

feasibility studies of the strategic mineral deposits, - determine government ownership

share, - add the deposits those exploration work was done by government fund to the

strategic mineral deposits list.

The Government is working on to put in circulation of the strategic mineral deposits during

the 2013-2014.

Its result will enable investment growth, mining intensive development, sustainable

economic development and competitive capacity and improvement of citizens life quality

and level.

The licenses given to the currently operating companies Erdenet and Baganuur Ltd.

returned to the government reserve fund legally. The exploration works of these mines

were funded by the government.

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Between 2015 and 2016, to establish an oil refinery plant with processing capacity of 2 million tons of crude oil per year financed by Japan International Cooperation Agency (JICA).

Domestic production of petroleum products will be up to 60-70%.

Determine the sector development policy and introduce advanced, new

technologies for coal liquidation and gasification, natural gas and semi-coking

coal production.

Fuel production from shale oil by unconventional method:

◦ Conduct the research on Mongolian shale occurrences and make a research

agreement on shale oil production technology, liquid and gas production, and

products from the shale.

.

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