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Mining Regulation

Mining is a significant industry in Mongolia, and the country’s parliament and government have put in place various policies and regulations to govern the sector. These includes the country’s long- and mid-term policies, as well as related laws and regulations such as the Law on Minerals and Investment Law.

The Mongolian government has pledged to make the license issuance process transparent and simple, while also supporting responsible mining practices. In addition, the government is dedicated to protecting the rights and interests of foreign and local investors in the mining sector.

During the Mining Week, an event held to celebrate the 100th anniversary of the Mongolian mining sector, Ganbaatar Jambal, who is the Minister of Mining and Heavy Industry of Mongolia and a Member of Parliament, outlined the government’s policy guidance for the coming years. He emphasized that the Government of Mongolia has made a commitment to ensure that the license issuance process is transparent and easy and has policy to support responsible mining as well as the rights of foreign and local investors under the law.

In addition to supporting responsible mining and protecting the rights of investors, the government also aims to provide opportunities to the private sector and enhance the competitiveness of Mongolia’s mining sector.

“We are ready to collaborate with both domestic and foreign investors and are determined to protect their rights and interests under the law”
Ganbaatar Jadamba
Minister of Mining and Heavy Industry of Mongolia

Under Mongolia’s long-term policy “Vision 2050” and mid-term “New Recovery Policy”, the government has a policy of supporting the exploration, extraction, processing, and delivery of the benefits of its mineral sector to its people. Within this policy framework, the goal is to increase mineral exploration, add value to processed production, and deliver the benefits of mineral sector values to its people through a national wealth fund.

In order to achieve that, the government is in the process of renewing the legal environment of the mining sector, with several law bills currently under consideration. Some of these bills are in the parliamentary discussion stage, while others are being drafted. They include the Law on Heavy Industry, the Revision Law on Oil Production, the Law on Commodity Exchange, the Law on National Treasure Fund, the Revision Law on Minerals, and the Revision Law on Subsoil.

In December 2022, the Mongolian Parliament approved the bill for the Law on Commodity Exchange, and since then, commodity trail trading has been ongoing.

Law on Minerals

The mining sector in Mongolia is regulated by the Law on Minerals, which was first enacted in 1994 and has been amended several times since then, including in 1997 and 2006. This law has encouraged foreign investment in the mining sector, and following its passage in 1997, investment in mineral exploration in Mongolia has risen dramatically. According to the Ministry of Mining and Heavy Industry, by the mid-2000s, Mongolia was attracting 4% of global financing for mineral exploration.
With the implementation of the Mineral Law, Mongolia has issued over 6,000 exploration licenses covering 44% of its territory, actively supporting geological exploration. This increased exploration has resulted in the discovery of a promising pipeline of potential world-class mineral projects, including the famous Oyu Tolgoi deposit.

The 2006 revision to the legislation established a new category of Strategically Important Deposits, which will be exploited by both the Mongolian government and private entities. Today, in addition to the Mineral Law, there are a total of 10 pieces of legislation regulating the mineral sector in Mongolia.

The Law on Minerals outlines the rules and regulations for all aspects of the mining sector, including the granting of licenses, the collection of taxes and fees, and the protection of the environment and local communities.

Some of the key provisions of the Law on Minerals include:

State Policies in Mineral Sector

“Vision-2050” Mongolia’s Long-term Development Policy

The Government of Mongolia has drawn up its “Vision 2050” or General Development Plan until the 2050. The main goals on the mining sector are outlined as follows:

However, the government aims to implement both measures over the course of the next decade and have reached its goals by 2030. Currently, Mongolia’s mining sector exports most of its extracted raw materials without processing and has low added value. In the future, the government has deemed it necessary to develop the processing industry itself and improve the infrastructure to support this in order to leverage this sector for rapid economic growth.

Government Action Plan for 2020-2024:

The Mongolian government updates its action plan every four years. Approved in 2020, the program includes a number of major mining-related activities.

The copper industry:

The action plan focuses on the three largest copper deposits which include the following objectives:

The coal industry:

Build required infrastructure for the Tavan Tolgoi coal mine and commission a coal enrichment plant within the framework of establishing an Industry and Technology Park. Complete the construction of the Tavan Tolgoi-Gashuunsukhait and Tavan Tolgoi-Zuunbayan bound railroad, and commence the Sainshand-Baruun-Urt-Khuut, the Khuut-Bichigt, Khuut-Choibalsan and the Zuunbayan-Khangi-bound railroad construction projects.

The oil industry:

Accelerate the exploration and use of oil and non-conventional oil and increase reserves. Resolve the issue of financing sources required for supplying raw materials to the oil refinery and construction of pipelines, as well as carry out construction work. Construct an oil refinery plant based on local raw materials in Altanshiree soum of Dornogovi aimag. The refinery is expected to be operational in 2024.

Mining license granting and exploration:

Increase mineral revenues by boosting investment in the exploration of raw materials for the high-tech industry such as rare earth elements, precious, non-ferrous, ferrous and mixed metals, nonmetallic minerals and oil. Enhance geology and research works funded by the state budget and increase mineral revenues. Strengthen mining sector institutions, develop responsible mining practices, make the licensing award process transparent and open to the public, and revoke illegal permits.

Energy reliability:

Commence construction of the Tavan Tolgoi thermal power plant with 450 МW installed capacity and related infrastructure in order to supply the necessary energy to those mines operating in the southern region.


The Parliament of Mongolia has approved the State Policy on Minerals, 2014-2025, with its Order No.18 of January 16, 2014. The main objective of the policy is to establish stable environment for investment, to improve minerals exploration, exploitation and processing qualities by introducing advanced technologies and innovation that have minimal impacts on the environment, produce value-added products and improve competitiveness at international Market.

Legal environment

The Minerals Policy seeks to improve current laws and regulations and implement international standards across a number of areas such as:

Geological industry

The goal of the Minerals Policy in the geological sector is to increase the quality of, and information in, the geological database of the Mongolian State through:

Improvements in the registration and monitoring system for mineral deposits is also envisaged by ensuring that there is a formal annual update of all mineral reserves in Mongolia.

Extraction industry

A key objective of the Minerals Policy is the development of a transparent and responsible mining extraction and processing industry that is export oriented, compliant with modern international standards, and capable of providing sustainable development to the Mongolian economy.

In relation to strategically important mineral deposits, the objective is to improve cooperation between the State and the private sector while also increasing the level of State control and monitoring capabilities, as well as overall responsibility. The Minerals Policy does not state how this will be achieved and it therefore remains to be seen how this objective will be implemented.

Finally, an important goal of the Minerals Policy is to ensure efficient monitoring by the State and or/local authorities of all mining operations and the related levying of fees and charges, including the avoidance of any duplication of fees and charges.

Processing industry

The Minerals Policy aims to increase secondary processing of minerals and support value-added production through policy and legislation, including the provision of tax and financial incentives to be offered by the State.

Examples of processing projects potentially eligible for State support include coal concentrate, coking coal and chemical plants, coal-fired power plants, liquid fuel and gas extraction out of brown coal, and liquid fuel extraction out of oil shale deposits.

Environmental protection and rehabilitation

Environmental protection is a key aspect of the Minerals Policy, as it seeks to develop rehabilitation regulations consistent with international standards.

The use of surface water rather than underground fresh water will be encouraged for mining and processing operations. Priority will also be placed on the re-use of water and the use of gray water.


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