President Ts.Elbegdorj’s address to the State Great Khural on the occasion of the 100th anniversary of the Restoration of National Independence was a wide ranging one, covering issues such as the nation’s economy, politics, society, citizens’ life, freedom and Mongolians abroad. The President has offered his views to be debated by the public in the Open Discussion forum. We give below only what he said on the mining industry. It has to be remembered that this year Parliament is to hold discussions on the mineral policy, a package of new laws on mining and amendments to some existing ones.
This is a free translation and not officially authorised.
Some people have written that the nation of Mongolia came close to destruction in the beginning of the last century. I think they were blind to the strengths of the nation while exaggerating its weaknesses. I will never agree with the idea that Mongolia could ever be destroyed. We cannot humiliate our ancestors like this. But I am glad that we all now agree that our country was awakening to a revolution and fighting for it exactly a century ago.
Today, 100 years later, analysts see our country differently. They include Mongolia among nations that will have high-speed development in the near future. This is a very positive view of our prospects. The path will be beset with challenges, and we are the ones who have to devise ways of overcoming them.
Most of the talk about the development and challenges of Mongolia centres on the natural resources of the country. I believe with all my heart that Mongolians will be able to make the best use of these and prosper greatly. The reason for my optimism is that day by day, citizens are showing a better understanding of what it means to be the true owners of the resources. There was a time when mining deposit licences covered almost half the territory of our country. Citizens were unhappy and the State took note of their criticism. It took some measures and now the extent of area thus covered is three times less and will ultimately be no more than 15 per cent of Mongolian territory. But this by itself should not make us complacent.
The number of those who await the grant of an exploration licence is still very high. The number of projects to be undertaken is great as well. Every licence, whether issued to foreigners or Mongolian nationals, is being reviewed by competent authorities. All disputes have to be resolved in a clear manner. A licence, if it is once confiscated by the State, should not return to its previous owner. Recently I issued instructions to inspect all minerals and exploration licences valid within 200 kilometers from the international borders of Mongolia. The State Great Khural should quickly pass an act to ban issuance of fresh exploration licences until the time the new Mining Law is passed.
Issues related to minerals and licences are far from reaching a final solution. A package of laws on mining is being developed; there will be others as well. Amendments will be made to already existing laws. There should be public discussions as this field requires precise legal adjustments. The new Mining Law is expected to put an end to the practice of covert trading in minerals while holding an “exploration” licence. The anomaly of issuing exploration licences ro whoever came first will be abolished. Open bids will be organized at every level: finding, exploring, extracting and processing of minerals.
Anybody desiring to conduct a mining business in Mongolia will have to submit a detailed project plan, and once this is approved, will have to make a proper legal agreement. This should include issues concerning citizens’ rights, income distribution, the environment, and ultimate closure of operations. Local citizens will have a most important voice when any permission related to minerals is granted. This will validate the people’s ownership of the natural resources.
In case any exploration is made with funds from the State budget, more than 51 per cent of the deposit will be under the ownership of the Mongolian state or local entities. Even if the entire exploration costs are met without any state budgetary support, at least 34 per cent of the ownership will be in Mongolian hands. At present, 51 and 34 are the respective maximum percentages of Mongolian ownership. The new law seeks to make them the minimum percentage of the State’s ownership. At present, these provisions apply to only 15 mineral deposits, but the proposed new law will ensure their application to all. The true owner of the natural resources should have the ultimate ownership and right to usage.
As an initiator of the draft of the new Mining Law, I have now openly stated, for those who are interested, some of the principles that are going to be followed. Discussions and proposals directed to providing the right for the people of Mongolia to be the owner of the natural resources and using them must continue to take place. If the future of Mongolia’s development depends on mining, all issues relating to it must be brought in the spotlight.