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Wednesday, July 6, 2011




Mongolia Briefing is a magazine and daily news service about doing business in Mongolia. We cover topics relating to the Mongolian economy, the market in Mongolia, foreign direct investment and Mongolian law and tax. It is written in-house by the foreign investment professionals at Dezan Shira & Associates


Mining

New Methodology for the Minerals Royalty Calculation has been Established

By Elena Fehrbach

The Government of Mongolia has issued new Resolutions Nos. 88 and 89 on the definition and calculation of mineral royalties.

Basis for the royalty calculation and general terms:

  • The royalties on coal exports will be based on the export sale’s contract price of the coal mine owner. The previous royalty was based on the buying Chinese market price.
  • The mineral royalties shall be paid within 21 days after the commodities sale’s completion. In the previous version of the regulation, the royalty was supposed to be paid within the next quarter from the sales date. Continue reading
Posted in Energy, Featured, Markets, Mining, Regulatory Update | Leave a comment

Mongolia’s Policy on the Minerals Sector is Under Final Discussion

By Elena Fehrbach

Jan. 5 – The Policy on the Minerals Sector has been first introduced in July 2013 as a legal guideline on the main principles of operation in the minerals sector approved by the government. Since July, the Policy undergone a number of revisions and is now well-shaped for the final discussion by the Parliament. It should be noted, that the Policy is not an equivalent or substitute to the Minerals Law, but a leading document showing country’s direction in the minerals sector.

As for the Minerals Law, the new draft of the Law has been introduced to public approximately year ago and became a reason for a serious criticism on behalf of mining companies and potential investors. The first draft of the Law had a series of unfavorable ownership and operations conditions treated as “unacceptable” in some cases. The Government’s reaction on the criticism was a prompt promise of further work on amendments that would involve specialists from the industry involved in the minerals sector operations directly or indirectly, such as representatives of mining companies, law firms and financial institutions. Continue reading

Posted in Business, Markets, Mining | Leave a comment

Progress on Oyu Tolgoi Negotiations with the Mongolian Government

By Elena Fehrbach

The dispute between Rio Tinto and the Government of Mongolia regarding the development of Oyu Tolgoi, the biggest copper mine in the world is still ongoing. As noted by the Head of Communication of Turquoise Hills, a Mongolian subsidiary of Rio Tinto, the dispute on the remaining issues of conflict can be resolved before the end of 2013. Out of 30 issues in the negotiations agenda, at least half have been already solved. The issues cover aspects related to the budget for the underground mine expansion, management and control structure, confirmation of the spending related to the 1st stage of the project and other issues. Continue reading

Posted in Business, Mining | Leave a comment

Law on Prohibiting Mineral Exploration and Extraction Near Water Sources, Protected Areas and Forests

By Elena Fehrbach

The Mongolian Government is currently reviewing the Law on Prohibiting Mineral Exploration and Extraction Near Water Sources, Protected Areas and Forests. This Law is commonly referred as the “Long Name Law”. The first version of the Law was adopted in 2009 aiming to keep the mineral extraction operation within the environmental framework that would ultimately protect rivers and forests from harmful disturbing. Continue reading

Posted in Business, Legal and Regulatory, Mining | Leave a comment

Mongolia Plans Parliament Session On Oyu Tolgoi Project

By Elena Fehrbach

Aug. 26 – The Parliament of Mongolia has made a decision to organize an extraordinary session which will take place between September 2 and September 6, ahead of the scheduled October session due to ongoing issues deteriorating economic and investment situation in the country. Some of the issues to be resolved during this session are:

  • Amendment of investment laws: Strategic Foreign Investment Law and Foreign Investment Law;
  • Financing issues related to Rio Tinto’s development of the second stage of Oyu Tolgoi project, namely, underground operation that will allow commencement of extraction of the richest copper mineralization;
  • Overall weak commodities market and steps Mongolian Government can possibly take to help local companies operate in challenging conditions Mongolia is currently facing. Continue reading
Posted in Foreign Trade, Mining | Leave a comment

Samsung C&T Corp to Build Railway Connecting Tavan Tolgoi with Chinese Border

By Elena Fehrbach

May 21 – South Korean Samsung C&T Corporation won the tender and signed the agreement for the construction of a 217 kilometer railway that will connect Tavan Tolgoi coking coal deposit with the Mongolia-China border.

The project also assumes construction of the relevant infrastructure, such as rolling stock depot. Samsung will be sole contractor to implement the project. Estimated cost of the project is US$483 million. Continue reading

Posted in Business, Mining, Shipping & Logistics | Leave a comment

Potential of Oil Shale in Mongolia

By Elena Fehrbach

Apr. 18 – Oil shale in Mongolia has been on the radar of technical experts and investors for a number of years already, but the actual potential of oil shale development in Mongolia has never been widely discussed. Preliminary “greenfield” estimates assume 800 billion tonnes of oil shale are available in Mongolia. The preliminary estimate was completed in 1990 based on exploration of about 19 per cent outlined oil shale area. Though the final amount of oil shale is not defined yet, it is clearly a promising opportunity for Mongolia to establish a fuel independence. Continue reading

Posted in Business, Energy, Mining | Leave a comment

Proposal to Develop Tavan Tolgoi Supported by Government

By Elena Fehrbach

Apr. 15 – Ch. Saikhanbileg, Minister of the Cabinet of Mongolia met Francisco J. Sanchez, the Under Secretary for International Trade of the U.S. Department of Commerce to discuss economic and trade cooperation between 2 countries. During the meeting, the Minister noted that Mongolia is willing to widen the economic relationship between Mongolia and USA. One of the important steps taken by the Ministry recently is introduction of the amended Strategic Foreign Investment Law creating encouraging investment opportunities for private companies. Continue reading

Posted in Business, Mining, Politics | Leave a comment




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