Wednesday, December 24, 2014

“Transparent Mining” Conference Newsletter №1, December 23, 2014

December 23, 2014                 №1                   Ulaanbaatar

The solution government has renewed and approved the structure and the staff of the Ministry of Mining. The Legal Division of the Ministry was abolished under the renewed structure of the Ministry. Ministry will function with 5 departments and 4 divisions with experienced and skilled workforce who know the sector in depth.

It is set that the Ministry will operate with 66 employees, upon downsizing 15 percent of the previous vacancy of 75. The Nuclear Energy Agency was abolished and 8 personnel who are responsible for the matters of radioactive minerals will transfer to the Ministry of Mining.

Ministry of Mining to support resource producers

The Ministry will continue the Reform Government's policy in the minerals and petroleum sector, enhancing its undertakings, and support resource producers. Namely, the Ministry will introduce the renewed composition draft bill on Earth Bowels Law, Law on Transparency in Minerals Sector, Safety and Health in Mines Convention C176 of International Labor Organization, to be signed by the Parliament.

The Ministry will enforce the implementation of related bills and laws of the newly adopted State Policy on the Minerals Sector, and amend the related rules, regulations and standards accordingly. Furthermore, the Ministry will develop programs for copper, gold, fluoride, iron, rare earth element, zinc, mixed metals, and  the programs will be adopted by the Cabinet.

The Ministry will formulate and catalogue the policy on concentration and processing plants, and will take necessary actions for the implementation. Regulations and standards for the mine and processing plant closures, and will be developed and adhered to the international expertise and improve responsibility. It is to expand mutually beneficial cooperation further with countries where mining sector is highly developed. Mining and petroleum sector policies and activities will be broadly publicized, especially giving priority to provide information and promotion abroad, targeting global investors.

Miners to confer

Within the framework to commemorate the 92nd anniversary of the mining sector of Mongolia, the Ministry of Mining, Mineral Resources Authority, and Mongolian National Mining Association are organizing the "National Miners Symposium" with the slogan "For Occupational Safety and Health". The aim of the symposium is to promote sustainable development, improve productivity of the sector, and to discuss work environment, and issues the miners face. The symposium will be held on December 23, 2014.

Bidding process for the 106 special licenses organized in stages

Exploration licenses for 15 areas were re-issued out of 23 areas announced, where its bid threshold prices were confirmed, in accordance with the "Regulation for selection procedure to issue special licenses for the 106 mining and exploitation areas where its special licenses were revoked by court order".

In 12 of the 15 areas former special license holders won the bidding and obtained licenses. Remaining 3 areas, new entities won the bidding. The former license holders were granted permits to receive reimbursement for the expenses incurred in the licenses area.

Another three areas which have not received any bids after two consequent bidding announcements are transferred to the application areas under the Articles 18, 19 of Minerals Law of Mongolia.

About 316 million tugrik were allocated to the state budget from the selection procedure.

Mineral resource authority has announced a tender bid for additional 18 areas where geological exploration and other expenses were validated in accordance with relevant legislations.

Entities which have not confirmed the geological, exploration and other expenses incurred in the area need to contact with Mineral Resources Authority.

152 exploration report, 149 feasibility studies for mining and mining industries were received 2014

Minerals Professional Council has met 44 times in 2014, and resolved the following matters:

-       5 mining and mining industry technical and feasibility studies were discussed and determined by 3 extended meetings.

·         Outcomes for the geological studies funded by state budget, and budget amendments were discussed by 8 meetings; and 20 project outcomes as well as 38 ongoing project budget amendments were discussed and the Minister of Mining issued an order.

·         Council were convened 14 times, to discuss reports for privately funded minerals exploration work and to record the reserves in the state registration, and discussed and determined 152 reports.

·         149 mining and mining industry feasibility studies were discussed and determined by 19 meetings to discuss feasibility studies for mineral field exploitation.

·         17 category of minerals were added to the minerals reserves by the extended, and sector meetings of the Minerals Professional Council.

Main mineral reserves are: Gold 98.1 tons, Iron 35.6 thousand tons, Coal 6.5 mil.ton, Copper 978,846 tons, Fluoride 4,168.28 thousand tons.

MNT 10 billion is set for geology survey, financed by the state budget

The Parliament has ratified the geology survey financing at MNT 10 billion in 2014, as it is set forth in the State Policy on the Minerals Sector bill that the financing for the geology survey related expenses is to be increased each year. Indicated in the Government platform, works of integrated geological mapping at scale of 1:200,000 for the 81.94 percent of the territory, and 31 percent at scale 1:50,000 was done with fund increase in the geology survey financing. 8 thematic geology mapping, as well as 3 foreign cooperation projects are being implemented successfully.

State Committee received 24 new mining, and concentration plants in 2014

24 of the 45 mining, and concentration plant projects that started in 2014 were fully commissioned and received by the State commission. The remaining plants are not commissioned yet due to financial, market, infrastructure and other issues.

The commissioned plants are as follows: open-pit mining – 19, concentration plants – 4, semi coked briquette plant – 1. These plants created 2,687 new jobs, and the project investment reached the total of about 509 billion tugrik.

The minerals category are:

Gold mine – 5

Iron and coal mine – 9

Iron and fluoride dry-concentration – 3

Coal dry-concentration – 1

Construction materials – 5

Semi coked briquette – 1

Licenses for 20.94 million hectares is to be issued through applications process

By the 239th Government decree of 2014, exploration special licenses will be issued for a total of 20.94 million hectares of land through applications process; and 10.15 million hectares of land some of which containing minerals reserves, where its prospects are determined through geology survey funded by State budget, will be issued through a bidding process.

In accordance with national security policy, the groundwork is being laid to issue exploration special licenses in orderly and planned form, taking the infrastructure, green development, and investment equality into consideration.

Of the 10.15 million hectare field, 6.2 contains minerals reserves, prospects determined through geology survey funded by State budget; 2.32 – special licenses are expired; and 1.56 million hectares have provoked special licenses.

The fields where the value and prospects are determined first will be announced, and the licenses will be issued through bidding process.

Necessary preparations are completed to accept exploration special license applications online. Permits will be awarded starting mid-January, 2015, making it possible for the projected exploration work begin early spring.

Basic mineral commodity exports increased

Volume of mineral commodity production, and exports as of November 2014:





I - XI, 2014




I - XI, 2014


I - XI, 2014

I - XI, 2013

I - XI, 2013

Copper concentrate

thousand ton





Molybdenum concentrate



















thousand ton












thousand ton











Production of copper concentrate rose by 254.5 thousand tons (35.7%); molybdenum concentrate 191.3 tons (5.6%); gold 2.1 tons (25.1%); iron ore 1.8 million tons (32.8%); fluoride concentration production 126 thousand tons (60.8%), petroleum production 2.3 million barrels (49.1%), respectively, compared to same period of the previous year.

The exports of the following raw materials have doubled in quantity since this time last year: coal by 822.6 thousand tons, or (35.7%); gold 1.0 ton, or (14.1%); petroleum 1.8 million barrels, or (39.7%); copper concentrate 667.1 thousand tons, respectively.

In November 2014, a total sum of MNT 1 trillion and 75.4 billion was contributed to the state budget as tax income from the mining industry.

Revenue performance of the Minister's budget is at 125.2 percent

Mineral Resource Authority contributed a total sum of MNT 41.6 billion to the State budget. Of these, MNT 38.2 billion was exploration and exploitation license fee; MNT 1.7 billion reimbursement fees for explorations funded by state budget, other at MNT 1.9 billion.

Petroleum Authority of Mongolia also contributed MNT 245.3 billion to the State Budget, of which petroleum income accounted for MNT 243.4 billion, with MNT 1.9 billion from other income sources. 

Oil price is stable

1.1 million tons of oil were imported in the first 11 months. 90.8 percent of the imported oil were from the Russian Federation, and the state owned Rosneft company supplied the 63 percent. WTI oil prices were dropped by 29%, Brent 36%, Urals-32 36%, Dachin-33 by 40% respectively in the world market. Currency rate discount through forward agreements and soft loan programs to stabilize retail prices are being halted in stages. Works to shift soft loans to commercial loans with conventional financing, and lower USD rate to MNT 1470 – 1800. Retail prices were stable for more two years, and studies are being done keep it stable further.

Fuel price is stable

As of 22 December 2014, the fuel reserve is 114.6 thousand tons, or suffice 43 days of regular consumption. Hereof, A-92 has 43 days, A-80 has 60 days and diesel fuel has 36 days of reserves left. It indicates increase in number of reserve days compared to previous months.


No comments:

Post a Comment