No exploration licenses issued in 2011

Mining operations can be detrimental to the environment

Issuance of special licenses for exploration of mineral resources has been banned until December 31, 2011.

When parliament discussed a Bill at its plenary meeting on prohibiting the issuance of the special license on the exploration of mineral resources, initiated by President Ts. Elbegdorj on June 3, 34 members out of 44 turnouts or 77.3 percent supported the bill. The law came into effect the day it was approved.

In accordance with a recommendation by the National Security Council, the same law initiated by the President was approved by Parliament before and issuance of special exploration licenses was stopped from May, 2010 to December 31, 2010. However, the President submitted another proposal in 2011 and the issuance exploration licenses was cancelled until April 30, 2011 because it was considered that actions to be taken in the minerals sector and further purposes of the sector have not been determined in legal frames during that period. The period of prohibiting license issuance finished early in May and they are still not issuing licenses.

At discussion about the new minerals law, President Elbegdorj said, “The National Security Council issued a recommendation on April 27, 2010, and gave instructions to the President to initiate a Bill on temporarily prohibiting the issuance of special licenses on minerals’ exploration and submitted it for discussion in parliament. Why this issue was discussed at the National Security Council is that relations surrounding mineral resources became an issue connected with the common interest and national security of Mongolia. There is no issue about starting to issue licenses from April 30. The issuance must be stopped until a new law to regulate relations of mineral resources is made based on previous lessons. Also, instructions were given to stop license trading and re-issuance of licenses given back by companies and individuals.”

The bill submitted by President Ts.Elbegdorj stated not to issue exploration licenses until a new minerals law is adopted. But MPs considered the law necessary to state a certain deadline to ban issuance of license. During discussion of the Bill, MPs asked about the process of drawing-up a revised bill on mineral resources. A working group comprised of over 10 people from the Economic Standing Committee and relevant officials from the Presidential Office, government, and many experts are working on the revised Bill. D. Zorigt, head of the Economic Standing Committee, responded that the Bill is expected to be submitted by mid June and it is possible to discuss the Bill during this spring session, or autumn session if it does not succeed. MP D. Gankhuyag said that there is talk that over 40 special licenses have been issued since approval of the previous law on prohibiting issuance of exploration licenses and asked if the issue has been confirmed. He added, “The minerals sector has been so disorderly and it became a mine for dirty money. There are many negative incidents to export raw minerals very cheap, share monies beyond the border, avoid taxation, swindle the State by the guise of a Stability Agreement, use poisonous substances and not rehabilitate the environment.

For example, a ton of coking coal costs USD300 on the world market, but it is exported from Mongolia at just over USD50. Although Mongolia’s coking coal is raw and unprocessed, there is much discrepancy in cost.

There is no need for such a mineral resource sector. Can these issues all be resolved with the revised Bill?” D. Zorigt responded, “No exploration license was given since license issuing was prohibited and members of the standing committee went to the Mineral Resources Authority and checked. The working group for the revised Bill made assessments to previous laws of mineral resources and are working to revise the law because there are many problems in the sector.”

As of 2011, a total of 14,734 licenses were issued since 1997 according to the studies. More than 600 deposits were registered in Mongolia and by 2000, all deposits were licensed. In 2000-2004, most of the minerals exploration licenses (7418) were issued.

source: 'The Mongol Messenger' newspaper