Mongolia’s gold mining surpasses planned output

Last month, Mining Minister D.Gankhuyag said that gold mining in the first 8 months this year surpassed
5,773.6 kg or by 80 percent. With implementation of the ‘Taxation law on price growth for some products’ (68% Windfall profits tax law) approved by parliament, gold sales obtained hidden form and the amount of gold sold to Mongolbank decreased.
According to official statistics, 24 tons gold were mined in 2005 which notably decreased in the following
years, becoming 6 tons in 2012 and falling 4 times again. “This year, gold extraction increased”, he declared.
With the above-mentioned law, the tax burden on gold mining entities grew, the amount of gold sold to Mongolbank and commercial banks sharply reduced and the state currency reserve decreased. Under
this situation, the government worked out a draft law on openness in gold sales and submitted the draft law for the approval of parliament. Some 77 tons of gold have been mined over the previous four years before
the above-said law was endorsed, but with implementation of the law, 48 tons of gold were mined in four
years and gold extraction fell by 38 percent.

According to the acting law, if gold is sold to Mongolbank or commercial banks the royalty for reserve utilization will be 5 percent and the growing royalty was also 5 percent. In the new draft law on gold
trade, the royalty for exploitation of gold reserve is estimated at 2.5 percent without making payments for growing reserve utilization. The gold price decreased despite growth of gold mining. The price of
gold fell by 11.9 percent compared to last year.
Silver price decreased by 20.1 percent, copper by 6.8 percent, zinc by 1.5 percent, molybdenum
by 16.2 percent, refined coal by 28.7 percent while price on lead grew by 4.7 percent, tin by 4.3 percent, iron ore by 5.1 percent respectively.

In the first 8 months of 2013, copper production was at 73 percent or 461.7 thousand tons, molybdenum production at 99 percent or 2,441.0 thousand tons, coal production at 64 percent or 14.9 million tons, reported the mining ministry.

At the monthly press conference ‘Openness in Mining’ called by Mining Ministry, Minister D.Gankhuyag
reported on Tavan Tolgoi coal exports. “On September 5, the West Tsankhi mine started exporting coal. As of September 22, 63.754 thousand tons of coal or 636 trucks of coal were transported. The West Tsankhi mine of the Erdenes Tavan Tolgoi Co., Ltd has 1.2 billion tons of coal reserve.

Almost 3 million tons coal were mined and sold and export income is supposed to increase by US $120-150
million. This year, we intend to mine 4.5 million tons of coal from the East Tsankhi mine, and 3 million tons from West Tsankhi mine totaling 7.5 million tons of coal, said the minister.

‘Khishigt Arvin Industrial’, ‘Mera’ and ‘Mongolian Miners’ companies started to mine coal at the West
Tsankhi site of the ‘Erdenes Tavan Tolgoi’ Shareholding company.

D. Myagmarsuren

Source:Mongol Messenger


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