MONGOLIA HIGHLIGHTS

Assessment of Mineral Policy Development –with a Focus on

ASM in MongoliaCASM Conference, Brasilia

Batsaikhan UsukhCoordinator, Sustainable Mining

ProjectMRPAM and SDC Mongolia

Framework for the Presentation

• Introduction to the SAM

• Observation on Mineral Policy Reform and Development

• ASM Policy Reforms and Development

• Assessment on ASM Policy

Introduction to SAM

Goal• Contribution to the responsible ASMObjectives• Support to legalisation of ASM• Support to Institutional development• Improvement of economic profitability of

ASM• Environmental Improvement

Observation on Mineral Policy Reform and Development

• The government accepted that the mining sector is the key to the country’s development

• Gold program was passed in 1992

• First mining law was approved in 1994, and revised several times (1997) and three times in 2006 – regulates large scale mining activities

• Tax on minerals (10%) with various fees – use of minerals, land and water

Observation on Mineral Policy Reform and Development

• Policies that stimulate foreign investment– Gold program 1992- Better tax environment (no tax for first 5 years) in investment agreement

• Ensuring a reasonable return to the national economy (1 ounce >500 US$) while supporting investors with lower tax (stable socio-economic-political situation)- Windfall tax in 2006- Government of Mongolia > 51% and investor 49% for strategic deposits

Observation on Mineral Policy Reform and Development

• How policies that simulated foreign investment were made in the 1990’s

- dominated with communist mentalities- No need to debate all over the country– Government set the goalsand developed the

policy– People were not interested in participating

because of ownership issues

Observation on Mineral Policy Reform and Development

• Ensuring a reasonable return to the National Economy

• After around ten years of transition (by 2000) the mentality of people has changed - so how is policy being made nowadays?

- learning lessons

- Media, (TV / newspapers) and civil movements express voices of the people

- Government starts to understand

- More focus on strategic deposits

Policy Development Process

Policy Makers / Government

MediaCivil Movement NGOs

People CitizensLess Debate

Missing Part What is needed: donors voice strong NGOs

ASM Policy Reforms and Development

• The sub-sector emerged in the mid 1990’s / no attention given to the sub-sector

• Because of damage in protected areas, the government started to intervene in ASM activity from 2004 (Res #87, to eliminate)

• Due to the risk of mercury use without control, one more provision was added into the criminal law (crime against the nature and human wellbeing).

ASM Policy Reforms and Development

• The first law was drafted in 2003 and 2006

• No approval of the law

• MAIN DOCUMENTS

• Resolution 28 on Regulating ASM (Jan 2008)

• Sub program on the development of ASM – 2015 (Feb 2008)

• Temporary regulation on ASM (Feb 2008)

ASM Policy Reforms and Development (Draft Laws)

• The following steps have been taken:• Study tour to China and South American

countries• Extensive field trips to ASM sites• Law was drafted and debated throughout the

country (workshops, stakeholder meetings, field trips with policy makers

• Necessary studies were conducted• SAM project facilitated communication between

different stakeholders

ASM Policy Reforms and Development Temporary Regulation (TR)

• Copy of already draft law (good)

However the TR was:

• Not well planned in advance, urgently made in response to problems

• Very short time given to policy makers– Therefore no debate conducted

• No multi-stakeholder participation

• But luckily copy of already drafted law

Assessment on ASM Policies(Advantages)

• Defined long term program for ASM in Mongolia (accepting ASM as an activity)– Organising informal miners into miner-user

groups– Legalising ASM sub-sector– Reduction of unemployment and poverty– General shape of the documents is good

Assessment on ASM Policies (criticisms)

• Centralized experimental plants of hard rock –gold ore processing (questions – who owns it, how big should it be – trials)

• ASM-ers must be organised into unregistered partnerships (these are not flexible, limiting alternative forms of legal entities)

• Land allocation: classifying them as secondary miners

Assessment on ASM Policies (Criticisms)

• Economic activity rather than mining activity (no mining rights)

• Human rights issue (pregnant women and mothers with younger kids are not allowed to work at mining sites,

• ASM exploit only what is infeasible to other mining activities

Assessment on ASM Policy

• Temporary regulation (TR) is effective until the new law is approved

• Feedback on the TR must be reflected in the new law (advantage).

• Assessment of TR must be completed by the end of this year

• Inputs of international and national experts as well as feedback from the field are needed

• Thank you very much for your attention