mining & natural resources

     In spite of the Mongolian Government’s efforts to diversify the country’s economy, the mining sector remains to be its key sector. In 2019, direct foreign investments in the total amount of USD 2,37 billion were made to the mining sector of Mongolia – this comprised 75% of the total FDI in Mongolia in 2019. Also, according to the International Monetary Fund, Mongolia is one of the world’s resource-rich developing countries. In addition to profusion of mineral resources, Mongolia’s close location to major Asian economies and consumers of mineral resources, such as China, Japan, Korea, etc., makes the country’s mining sector one of lucrative business opportunities for international and domestic industry players alike. Coal, copper, and gold, among others, are the principal reserves predominantly mined in Mongolia.

     Momentous measures are being taken by the Mongolian Government toward building proper legal environment for development of mining sector.

     A recent study, conducted by the Ministry of Mining and Heavy Industry of Mongolia with assistance of German Corporation for International Cooperation (GIZ) on ten Mongolian laws related to the mining sector, has revealed that there exist 267 overlaps, 150 conflicts and 170 gaps in provisions of those laws. The Ministry has prepared drafts of amendments to such laws so as to solve these issues.

Moreover, according to the Government’s Action Program for 2020-2024, approved by the Parliament of Mongolia in August 2020, between 2020 and 2024, the Government will procure commencement of exploitation of some large deposits of Mongolia, including strategic deposits, such as Tsagaan Suvarga (copper), Salkhit (silver), Zuun Tsagaan Delii (fluorite) and underground mine of Oyu Tolgoi (copper, gold).

Besides, the Government plans to build and commission mineral processing plants in various parts of Mongolia and produce value-added mineral products by 2024 (e.g., metallurgical plant, oil refinery, coal, copper and precious metals processing plants etc.).

Addressing ever-changing environmental, social, safety and regulatory concerns are becoming a vital component of mining exploration and development in Mongolia, and should be approached with vision, understanding and skill. Although the mining industry continues to evolve in response to market demands and shifting priorities, both in Mongolia and internationally, we believe that investment in Mongolian mining companies, or trade with them, will remain attractive targets for foreign and domestic investors for a durable time.

In acting on many complex merger and acquisitions, and project financings on the industry, we have built a deep understanding of the challenges that our clients might face in the market. Our dedicated mining team can advise clients on any aspect of mining: from exploration and approvals to local community relation issues, M&A, joint venture, corporate governance, financing, mine development and construction, process plants, and mine maintenance or closure.

Our Mining and Natural Resources practice is headed by Batjargal Gombosuren.
“Macroeconomic Policy Frameworks for Resource-Rich Developing Countries”. Policy Papers. 2012 (70). 2012-08-24. 

“N.B.: The experiences above include, among others, assignments personally led and/or completed by the lawyers of KhanLex Partners LLP during its 2014-2018 merger spell with another local firm under “MDS KhanLex LLP” (now de-merged).”

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