No exploration licenses to be issued in 2012

No exploration licenses to be issued in 2012

Veto on license issuance extended for third time

License administration is as much of a concern as environmental degradation

On January 12, the first discussion of a Bill to amend the law on banning the issuance of new exploration licenses was held in parliament. During the first discussion, the Bill was adopted with support of 80 percent of MPs who attended the plenary meeting. By doing so, the term of banning issuing new exploration licenses was extended to December 31, 2012.

The law on banning the issuance of new licenses for minerals exploration was initiated by the President and adopted by parliament in 2010. The issuing of exploration licenses ceased from May, 2010 to December 31, 2010. As proposed by the President, it was re-extended until April 30, 2011 and December 31, 2011.

License-related relations caused by the disorderly issuance of great number of minerals licenses became an issue connected to the common interest of Mongolia and national security. To arrest the situation, Ts. Elbegdorj held the position that exploration license issuance should be ceased until a new law is made to regulate relations in mining sector, however parliament set the term to effect the veto.

D. Battulga, head of the Presidential Office, said that a new Mining Bill will be submitted to parliament in the near future. During the discussion of the Bill to amend the law on banning issuance of new exploration licenses, MPs touched on the issue of how to eliminate illegal acts of selling existing mining and exploration licenses rather than extending the veto term. For instance, MP N. Ganbyamba said that it is necessary to ban on-selling of licenses, rather than banning the issuance of licenses.

MP D. Gankhuyag cited that the act of selling licenses was intensifying. MP R. Bud suggested selling exploration and mining licenses through the Stock Exchange in order to limit millions of US dollars worth trading of the licenses by individuals and companies. D. Zorigt, head of the Standing Committee on Economy, said “There are groups of people who want to profit by selling the licenses rather than doing exploration. Generally, primary explorations are carried-out by small companies. There is a common practice that conducting certain explorations require huge sums of money, the license is transferred to big companies. Compared to earlier periods, control is tightening for mining license holders. They are required to give complete reports of fiscal year explorations and thus many mining sites are being controlled.”

Some MPs had a proposal to include a clause on banning the transfer of licenses in the Bill; however, polling on this issue was not carried out at the meeting of the standing committee. Therefore, the proposal was not supported. D. Battulga, head of the Presidential Office, said that in the Bill on Mining Law currently being worked-out, there would not be an issue on transferring the license. If the new Bill on Mining law is adopted earlier than the expiry date of the veto in effect, the veto will immediately be annulled.

Source: THE MONGOL MESSENGER