Discover Mongolia panelists

The 14th Discover Mongolia 2016 international mining investors’ forum is being held from September 8 to 9, at the Corporate Convention Center, under the theme “For Sustainability”.

Minister of Mining and Heavy Industry Ts.Dashdorj and Minister of Environment and Toursim D.Oyunkhorol presented the opening remarks at the forum, which was chaired by the first President of Mongolia, P.Ochirbat.

The forum organizers underlined that for the first time in the past eight years, one political party now dominates the government. They believe that this change has the ability to provide a stable legal and regulatory environment for the mining industry.

In his speech, Minister Ts.Dashdorj said that the government will prioritize issuing exploration licenses with increased transparency. He said, “Firstly, exploration license applicants need to submit a request to the Mineral Resource Authority and register to get an electronic number. Afterwards, they send their requests to local mayors for review. But in most cases, local mayors and representatives from citizens’ representative khurals don’t issue permission. That’s why we want to change the sequence of exploration license issuance procedure. We believe that first reaching agreements with local mayors is vital.”

Minister Dashdorj reported that the Ministry of Mining and Heavy Industry is cooperating with the Ministry of Environment and Tourism to bring the Law on Investment into compliance with other laws, and to create a legal environment on mine closure.

Chair of the forum, former President P.Ochirbat said, “The global economic situation has been difficult in the last three years. But in other countries, new technology, standards, and management are being introduced. The [economic] situation worsens when mining sector risk is added to state policy risk. As for Mongolia, the mining sector makes up around 80 percent of the nation’s total exports, and receives a majority of its foreign direct investment.”

P.Ochirbat underlined that there are many challenges related to infrastructure in the mining sector. “It’s time for us to understand that we can’t waste time by not establishing infrastructure. We’ve already lost over ten years. Mongolia now needs sustainable state policy. We are not able to utilize our Tavan Tolgoi mine given to us from God.”

“The government said that it won’t send Mongolian students abroad. This is all wrong. Even though technique is important, everything is made by people. Mongolia needs to focus on human resource development,” P.Ochirbat emphasized.

“Social licensing is being touched upon these days. The state makes a decision, and then they tend to change their decision following public opposition. That’s why before making any decisions, it is important for the state to receive a social license,” Ochirbat noted.

Presenting a speech at the forum, Director of the Board of Oyu Tolgoi G.Batsukh emphasized that Oyu Tolgoi is a company with sixty years of history.

“Our company places great importance on safety. That’s why we lead in safety among the companies of the Rio Tinto Group. We have worked for 200,000 hours since the mine’s operations started. Our staff consists of 8,800 employees, around 6,000 of which are the staff of our sub-contractors. Around 93 percent of our staff are Mongolian,” he stressed.

Batsukh said that Oyu Tolgoi spent 5.5 million USD on domestic procurement. “We have established a long-term cooperation agreement with Umnugovi’s authorities. Oyu Tolgoi deposits five million USD every year to the Goviin Oyu Fund. Its expenditure is determined and decided after discussion in a joint council meeting. Previously, we were issuing donations for the Naadam Festival or for tournaments, but now we want to focus on far-sighted investments,” Batsukh stressed.

He reported that the company is building a freshwater supply system for six million USD in Khanbogd soum, and constructed a road connecting Khanbogd soum to the Oyu Tolgoi mine. “Even though the prices of mining products on the international market are not good, we are paying attention to our social licensing,” he pointed out.

Batsukh also said that Oyu Tolgoi’s domestic procurement network is at 80 percent completion and is growing from year to year. “We are buying everything possible from domestic companies, and have signed cooperation agreements with 750 domestic businesses,” he underlined.

He emphasized that Oyu Tolgoi has received the financing required for development of its underground mine. “We have the potential to become one of the biggest copper players in the world. If we commission our underground mine on time, our export will increase. In order to do this, we need a sustainable business environment. If we construct a railway, we will be able to conduct export to third [neighbor] countries,” Batsukh stressed.

The Senior Economic Advisor to the Prime Minister, N.Enkhbayar, presented information about the nation’s macroeconomic conditions. N.Enkhbayar stressed, “In recent days, budget amendments have been at the center of attention. But even though the budget is being amended, we are not able to fix the basis of the budget deficit.”

Enkhbayar said that he expects the nation’s economic conditions to improve by 2017.

Sub-meetings were held on the forum’s first day on macro factors in mining, financial sector stability achievements, and catalyst projects.

Today, Discover Mongolia participants will discuss and exchange views on capacity building projects in the mining sector, state policy, mining sector development and productivity, efficiency, and cost reduction.