Minister Zorigt: No new mining exploration licenses for five years

The Mongolian Cabinet on May 28 approved a resolution that effectively stops the issuance of new mining exploration licenses for up to five years on all lands not currently subject to an existing license. All unlicensed lands – approximately 30% of Mongolia’s total land area -- will be immediately transferred to state reserves.. D. Zorigt, Minister of Mineral Resources and Energy, said on June 4 that the government will finance geological and exploration work on all these properties. The 2006 mining law specifies that the government should own 51% of all licensed “strategic deposits” where the geology was funded by the state. This decision sets the stage for a new era of government ownership of all new mining licenses.

Zorigt said that the government would have to obtain the approval of parliament on any proposal to take lands out of the expanded state reserves for mining development. Although the resolution does not apparently affect existing licenses, Zorigt said that the GOM would step up monitoring of current license-holders to insure compliance with environmental and other laws. The GOM will also expand the list of “strategic deposits” as defined in the 2006 mining law. 

Zorigt said the plan had been in development for two years. A separate study for a major revision of the national mining law, last overhauled in 2006, has been undertaken by President Ts. Elbegdorj for the past two years as well, with assistance from the World Economic Forum (Davos), and was expected to be presented to the State Great Hural earlier this year. Presentation to parliament has apparently been postponed until the fall session. It is unclear whether the Batbold government intends to introduce new mining legislation at some point  to follow up this May 28 resolution.
 
The 2010 moratorium on granting new licenses was first announced as a national security measure by President Elbegdorj and subsequently endorsed by parliament as an opportunity to study and re-assess Mongolia’s mining regime; at the time, the moratorium was characterized as a standstill measure while a new mining law was being drafted. In an interview in 2010 after the moratorium took effect, Elbegdorj said, "Half of the territory is covered by exploration licenses. I think that's enough. We have to save our wealth [for] our next generation."  

Zorigt said that the total number of mineral licenses in force in the nation has been reduced from 7000 to 4000, without any details as to how that reduction was achieved. Observers in UB say the reduction asserted probably includes the some of the 1800 licenses that Minister Zorigt ordered suspended in November 2010 for non-compliance with the Rivers and Water Law which are now under review. 

Since this resolution basically strips the Mineral Resources Authority of Mongolia (MRAM) of its primary licensing function, that agency’s future in uncertain. In April 2012,, D. Batkhuyag, former chairman of MRAM and an advisor to Prime Minister S. Batbold, was arrested on charges of abuse of power and corruption in issuance of mining permits and is currently in detention awaiting trial.