Mongolia needs to be competitive and competent to profit from its coal

Mongolia is a recent entrant in the world energy sector and the recent Coal Mongolia-2011 conference was the first ever international forum in Ulaanbaatar focused exclusively on one mineral. It saw policy makers, coal companies and professionals explain and elucidate current trends to international investors.

The success of the forum has raised interest about the planned subsequent meetings on copper, iron ore and rare earth metals. MMJ talked to some of those who spoke or gave presentations at Coal Mongolia-2011, or participated in the exhibition or just attended the meeting.

D.Zorigt, Minister of Mineral Resources and Energy:
Mongolia has proven coal reserves of  24 billion tons and we can claim an important place on the international stage. It is not that we are going to sell something that others don’t have, so we can succeed only if we are competitive and competent. One priority is to make the legal environment of the coal sector sustainable, clear and effective for a long term. It is necessary to have laws that do not change frequently.

Another priority is to ensure that all in the coal sector, both the Government and miners, accept the principles of responsible mining. The social responsibilities of mining include paying tax, complying with environmental laws, being accountable to the public, hiring local workers, training local experts and professionals, and using advanced equipment and technology.

The gest reason for amending the Minerals Law is the rehabilitation issue. Mining is blamed for environmental damage and destruction. Everybody knows who is to blame, but there is no  supervising system to stop it. The State Specialized Inspection Agency has fewer than ten people in its mining section. In the aimags, there is only one person responsible for inspection, and most of them are not adequately trained for the job. The Minerals Law must provide for proper supervision of how 4,000 licence hoders operate. A suvey has identified 566 territories which have not been rehabilitated. We shall now do it with budget funding, but action will be taken against the offending companies for their failure. We are not ruling out crimininal cases against them.

Mongolia needs an industrial park and there should be special laws for this. Business entities should be active partners in the work, spending some of their money for the public good. Once the railway issue is resolved, the existing industrial facilities in Darkhan, Erdenet and Choir have to be modernised and upgraded, and a new facility set up in Gashunsukhait in Umnugobi aimag. The railway route is of major concern for the coal sector, which needs to go both south and  north. Concerned Ministries and agencies have come to an agreement with Russia on discounted rates for transit transportation and a similar success is as important with China. Besides, it is imperative for Mongolian mining companies to be allowed to carry their coal to Tianjin. Today, a Chinese company can make an agreement with Mongolian Railway to transport coal through Russia, and corresponding facilities should be available in China.