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.
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.
Mongolian Government’s Action Plan for 2024-2028
In Mongolia, policies are implemented through political party platforms, which are then incorporated into the Government Action Plan (GAP) as part of the policymaking and execution process. The Mongolian government updates its action plan every four years. Approved in 2024, the Government’s most recent Action Plan includes a number of major mining-related activities.
The following are key mining-related initiatives in the current government’s action plan:
- Increase the processing level of raw materials in the mining sector, expand heavy industry capacity, and boost export revenues.
- Accelerate geological research and exploration, discover new deposits, and establish a comprehensive geo-information database.
- Finalize the location of copper concentrate smelting and processing plants based on Mongolia’s copper deposits and conduct detailed feasibility studies for infrastructure development.
- Launch the next major strategic development project on the scale of Oyu Tolgoi.
- Establish heavy industrial complexes for coke-chemical processing, coal-chemical processing, copper refining, steel production, fluorite ore processing, and construction materials manufacturing, enhancing value-added production.
- Commission a domestic oil refinery in Dornogovi Province, utilizing local raw materials to supply a portion of the country’s demand for automotive fuel meeting international standards.
- Support rare earth element processing projects through government policy initiatives.
- Encourage private sector involvement in industrial and technology parks in Baganuur, Nalaikh, and Bagakhangai districts, including supporting adjacent industries.
- Establish national fuel reserves capable of sustaining 3-6 months of domestic petroleum demand by constructing strategic storage facilities.
- Increase gold production and build a gold refining plant.
- Sign an investment agreement for the Zuunbayan-Ovoo and Dulaan Uul uranium deposits.
- Establish a pilot plant for coal-chemical technology research, workforce training, and feasibility analysis of future large-scale projects, focusing on synthetic gas, fuel, and hydrogen production.
“Vision 2050” Long-Term Development Policy
Mongolia’s Vision 2050 long-term development policy is structured into three phases, with a comprehensive approach that integrates mining, foreign direct investment (FDI), environmental sustainability, and infrastructure development. This strategy aims to ensure a holistic and sustainable approach to Mongolia’s economic growth.
One of the key features of Vision 2050 is its broad scope, covering mineral processing, strategic deposits, railway infrastructure, and business climate reforms to promote responsible resource development.
Key Mining and Investment Strategies in Vision 2050:
- 1. Development of Responsible Mining
- Strengthen responsible mining practices while increasing the processing and value-added production of mineral resources.
- 2. Infrastructure for Strategic Deposits
- Construct railways connecting strategic mining deposits to border ports, improving export logistics and ensuring efficient transportation of mineral products.
- 3. Debt Management & Investment Climate
- Enhance government debt management, reduce debt burden, and create favorable conditions to attract and retain foreign investment.
- 4. Business-Friendly Investment Environment
- Establish a fully supportive investment framework and create a favorable business environment for both domestic and foreign investors.
Beyond these, the economic development agenda under Vision 2050 includes goals such as:
- Expanding the utilization of major mining deposits with foreign investment.
- Promoting high-tech industries within the mining sector.
- Defining sector-specific development sub-targets to position mining as a leading economic sector.
New Recovery Policy
To implement Vision 2050, the “New Recovery Policy” was adopted in 2021.
Within this framework, the Revival of Border Ports initiative aims to increase the capacity of border crossings and enhance exports.
One common feature of these policy documents is their broad focus on environmental issues related to the mining sector. The policies emphasize minimizing negative environmental impacts, ensuring that development is carried out without causing harm to the environment.
New Recovery Policy
STATE POLICY ON MINERALS
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:
- the creation of a specific legal environment for exploration and mining of common-occurrence mineral deposits;
- supporting cooperation and legal organization of artisanal miners through state policy and by improving related legislative regulation;
- improving registration and supervision of transferring /purchasing of entity and company’s controlling shares/mineral exploration and mining special licenses; and
- providing the required legislative environment to allow specialized organizations with qualified engineering research teams to carry out exploration projects for the mineral sector.
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:
- implementation of internationally recognized methods and classifications; and
- intensification of prospecting activities by supporting private sector involvement.
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.