1. MONGOLIAN MINING SECTOR
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MONGOLIAN MINING SECTOR
Enkhbayar Nemekhbayar
Head of Economy, Finance and Investment Division,
Ministry of Mining

2. Content OPEN for BUSINESS History of mining sector in Mongolia
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Content
History of mining sector in Mongolia
Assessment of the current situation
Business opportunities
State policy of the mineral sector
Conclusion

3. Mongolian mining industry has history of 101 years
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Mongolian mining industry has history of 101 years
1990-
Free market-oriented legal environment and favorable investment environment
Large-scale state-run mining and infrastructure projects

4. Mongolia is one of the fastest growing economies
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Mongolia is one of the fastest growing economies
GDP, billion USD
GDP growth by percent
Ministry of Finance forecasts Mongolia to continue enjoying double digit growth in the coming years.

5. 17% 81% 23% 73% Economic development and mining sector GDP Export
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Economic development and mining sector
CONTRIBUTION OF THE MINING SECTOR (%) %
GDP
Export
Budget
FDI
17%
81%
23%
73% 20 21 17 89 91 81 20 21 23 78 81 73
2011
2012
2013
2011
2012
2013
2011
2012
2013
2011
2012
2013

6. Investment and production
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Investment and production
Production, billion MNT
Investment, million USD
The production of the mining industry is rapidly growing in the last years due to the investment. Therefore, the Ministry of Mining supports a policy to promote and encourage investors.

7. OPPORTUNITIES: Why invest in Mongolia? (1)
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OPPORTUNITIES: Why invest in Mongolia? (1)
1950 deposits and 8150 discoveries are registered in the State inventory of mineral resources, and 300 of them are under utilization.
Main Minerals Resources (2013) World Rank
Gold (tons)
2,493
Top 10
Zinc (thousand tons)
1,740
Iron ore (mln tons)
1,166
Crude oil (mln barrel)
2,438
Copper (thousand tons)
117,000
Top 10
Coal (mln tons)
175,500
Top 10
Shale oil (bln tons)
788
Uranium (ths tons) U
170
The Central and Eastern parts of Mongolia relatively well studied. While western part of country is untapped, which has a great potential for discovery of new deposits.

8. OPPORTUNITIES: Why invest in Mongolia? (2)
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OPPORTUNITIES: Why invest in Mongolia? (2)
RUSSIA
$2.118 Trillion
GDP
Population
8th Largest
Economy
KOREA
$1.198 Trillion
GDP
Population
15th Largest
Economy
MONGOLIA
CHINA
$8.939 Trillion
GDP
Population
2nd Largest
Economy
JAPAN
$5.007 Trillion
GDP
Population
3rd Largest
Economy
Source: World Bank, 2013

9. OPPORTUNITIES: Why invest in Mongolia? (3)
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OPPORTUNITIES: Why invest in Mongolia? (3)
Coal to Gas
$30.0 bln
Iron Ore
processing
$1.0 bln
Railways
$16.0 bln
Coal to Liquids
$2.5 bln
Copper
Smelter
$2.0 bln
Highways
$0.46 bln
Oil production
$0.8 bln
Coal washing
$0.8 bln
Oil refinery
$1.20 bln
Power plant
on Tavantolgoi
coal mine
$ 1.0 Bln
Power plant V
$1.2 bln
Total investment: $ Billion

10. Legal reform: OPEN for BUSINESS MONGOLIA is
Provide sustainable investment environments (stabilize the investment)
Non- discrimination between foreign and domestic investors.
Investment law (2013/10/03)
Improve the competitiveness and development of the mining sector, encourage the transparent and responsible mining industry based on private sectors.
State Policy on the Mineral sector (2014/01/16)
Royalty fee is 2.5%, when gold sells to the Central Bank or commercial banks.
Current royalty rate will apply when export the Gold.
Amendment in Minerals law (1) (2014/01/24)
Law of Mongolian on common – occurrence mineral resource (2014/01/09)
The rights of an issuance of the special license transferred to the province and local authority;
The area will be allocated without competitive tender;
Royalty rate is 2.5%.
Improved border point management
Better port regulation allows to accelerate trade and reduce bureaucracy
No VAT and customs until for the equipment of oil, shale and coal processing projects.
Law of Mongolia on exemptions from custom and VAT taxes,(2013/06/07)
Law on border ports (2013/12/26)
Main principles are not to restrict the investors’ right and basic principles of the Law dated on 2006.
Amendment in Minerals law (2)
(2014/07/01)
Petroleum Law
(2014/07/01)
Intensify the explorations of shale oil and crude oil.
Regulation for long named law*
Activities of special licenses, which issued before the law, shall be continued under the contract.
* Prohibit mineral exploration and mining operations at headwaters of rivers, protected zones of water reservoirs

11. CONCLUSION OPEN for BUSINESS MONGOLIA is
1. Democratic country with open market economy.
2. Stable political environment.
3. Great potential of minerals.
4. Neighboring with two giant markets.
5. Created a long-term, easy to understand and stable legal environment in the mining sector.
6. Favorable tax environment.

12. We are warmly welcoming you
MONGOLIA is
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We are warmly welcoming you
to MONGOLIA