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MONGOLIA is OPEN for BUSINESS
• History of mining sector in Mongolia• Assessment of the current situation • Business opportunities • State policy of the mineral sector• Conclusion
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ContentOPEN for BUSINESSMONGOLIA is
Mongolian mining industry has history of
101 years
Free market-oriented legal environment and favorable investment environment
3
1923 - 1990
1913 - 1921
1990-
OPEN for BUSINESSMONGOLIA is
Large-scale state-run mining and infrastructure projects
Mongolia is one of the fastest growing economies
Ministry of Finance forecasts Mongolia to continue enjoying double digit growth in the coming years.
3.9 3.9 3.5 6.9 8.8 10.6 11.7 14.7
6.4%
17.5%
12.4%11.7%
12.9%
5%
7%
9%
11%
13%
15%
17%
19%
0
2
4
6
8
10
12
14
16
2007 2008 2009 2010 2011 2012 2013 2014
GDP, billion USD
GDP growth by percent
OPEN for BUSINESSMONGOLIA is
GD
P g
row
th b
y pe
rcen
t
GD
P,
billi
on U
SD
GDP
%
Export Budget FDI
17% 81% 23% 73%
2011
5
2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013
172120 89 91 81 20 21 23 78 81 73
CONTRIBUTION OF THE MINING SECTOR (%)
OPEN for BUSINESSMONGOLIA is
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Investment and production
The production of the mining industry is rapidly growing in the last years due to the investment. Therefore, the Ministry of Mining supports a policy to promote and encourage investors.
OPEN for BUSINESSMONGOLIA is
Inve
stm
ent,
mill
ion
US
D
Pro
duct
ion,
bill
ion
MN
T
Main Minerals Resources (2013) World Rank
Gold (tons)
Zinc (thousand tons)
Iron ore (mln tons)
Crude oil (mln barrel)
Copper (thousand tons)
Coal (mln tons)
Shale oil (bln tons)
2,4932,493
1,7401,740
1,1661,166
2,4382,438
117,000117,000
175,500175,500
788788
Top 10Top 10
Top 10Top 10
Top 10Top 10
Uranium (ths tons) U 170170
OPPORTUNITIES: Why invest in Mongolia? (1)1950 deposits and 8150 discoveries are registered in the State inventory of mineral resources, and 300 of them are under utilization.
The Central and Eastern parts of Mongolia relatively well studied. While western part of country is untapped, which has a great potential for discovery of new deposits.
OPEN for BUSINESSMONGOLIA is
Source: World Bank, 2013
RUSSIA$2.118 Trillion GDP
143.500.000 Population 8th Largest Economy
KOREA$1.198 Trillion GDP
50.129.669 Population 15th Largest Economy
JAPAN$5.007 Trillion GDP
126.659.683 Population 3rd Largest Economy
CHINA$8.939 Trillion GDP
1.344.130.000 Population 2nd Largest Economy
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OPPORTUNITIES: Why invest in Mongolia? (2)
MONGOLIA is OPEN for BUSINESS
Railways $16.0 bln Railways $16.0 bln
Highways $0.46 bln Highways $0.46 bln
Oil refinery $1.20 bln Oil refinery $1.20 bln
Copper Smelter $2.0 bln
Copper Smelter $2.0 bln
Oil production $0.8 bln Oil production $0.8 bln
Coal to Liquids $2.5 bln Coal to Liquids $2.5 bln
Coal washing $0.8 bln Coal washing $0.8 bln
Coal to Gas $30.0 bln Coal to Gas $30.0 bln
Iron Ore processing $1.0 bln
Iron Ore processing $1.0 bln
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OPPORTUNITIES: Why invest in Mongolia? (3)
Power plant on Tavantolgoi coal mine $ 1.0 Bln
Power plant on Tavantolgoi coal mine $ 1.0 Bln
Power plant V $1.2 bln Power plant V $1.2 bln
Total investment: $ 56.96 Billion
OPEN for BUSINESSMONGOLIA is
• Activities of special licenses, which issued before the law, shall be continued under the contract.
• Intensify the explorations of shale oil and crude oil.
• The rights of an issuance of the special license transferred to the province and local authority;
• The area will be allocated without competitive tender;• Royalty rate is 2.5%.
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Legal reform:
• Provide sustainable investment environments (stabilize the investment)• Non- discrimination between foreign and domestic investors.
Investment law (2013/10/03)
• Improve the competitiveness and development of the mining sector, encourage the transparent and responsible mining industry based on private sectors.
State Policy on the Mineral sector (2014/01/16)
• Royalty fee is 2.5%, when gold sells to the Central Bank or commercial banks. • Current royalty rate will apply when export the Gold.
Amendment in Minerals law (1) (2014/01/24)
• Improved border point management• Better port regulation allows to accelerate trade and reduce bureaucracy
• No VAT and customs until 2018 for the equipment of oil, shale and coal processing projects.
Law of Mongolia on exemptions from custom and VAT taxes,
(2013/06/07)
Law on border ports (2013/12/26) Law on border ports (2013/12/26)
Law of Mongolian on common – occurrence mineral resource
(2014/01/09)
Petroleum Law
(2014/07/01)
Regulation for long named law*
OPEN for BUSINESSMONGOLIA is
* Prohibit mineral exploration and mining operations at headwaters of rivers, protected zones of water reservoirs
CONCLUSION
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OPEN for BUSINESSMONGOLIA is
1. Democratic country with open market economy.
2. Stable political environment.
3. Great potential of minerals.
4. Neighboring with two giant markets.
5. Created a long-term, easy to understand and stable legal environment in the mining sector.
6. Favorable tax environment.
We are warmly welcoming you
to MONGOLIA
OPEN for BUSINESSMONGOLIA is
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