Over half of the mining investment in Mongolia is from China
Source: www.mlr.gov.cn Citation: www.chinamining.com.cn Date: Nov 05, 2013
In the session of "Policy and Finance" of CHINA MIINING 2013 which was recently held, Chulunbat who is the vice minister of economic development of Mongolia, expressed that mining economy was an important impetus for Mongolia`s economic development. Mining economy of Mongolia accounted for 20% of the Mongolia`s GDP and 70% of the overall industrial production value and19% of export trade value. According to the report, for a long time, over half of the mining investment in Mongolia is from China.
The reporter learned from the forum that the updated investment law of Mongolia passed in early October this year came into force on 1 November, and series of supporting laws included Mining Act and Environmental Law will also be launched in recent months. The new investment law describes that mining and other industries of Mongolia invested by foreign state-owned enterprises hold the proportion of shares more than 33%, then the enterprises only should be approved by government departments of their countries and need not again submitted to parliament for approval.
In recent years, the legal environment of Mongolia is changeable. A series of policies and measures had weakened the foreign investments in this country. And these policies and measures have been complained by a lot of foreign enterprises including Chinese enterprises. Therefore, the local investment environment has been affected, resulting in a large number of foreign enterprises have to evacuate.
It is understood that since this year, foreign direct investment in Mongolia fell 41% year on year which led directly to a decline in the country`s foreign exchange reserves and national currency devaluation and other issues. It also had a great influence on the development of the mining economy in this country. Taking an example of gold mine, gold production of this country was only 2.5 tons last year, and substantially reduced over the previous few years. The phenomenon of illegal gold mining has become increasingly severe.
Chulunbat said that Mongolia`s authorities had realized that formulating policies and laws previously set was rather one partial. Implementation of the new investment act will help to restore the interest loss of foreign investment and create the investment environment of " have a better development opportunity, have a more stable development space"
In addition, recently Long-term Development Program for Mongolia-China Strategic Partnership which is signed by Mr. Norov Altankhuyag,. Prime Minister of Mongolia, during his visit in China with Chinese government clearly shows that the two sides will comprehensively deepen pragmatic cooperation in economy and trade in accordance with the general idea of the mineral resources development, infrastructure construction, promoting the overall development of financial cooperation. And according to the consensus reached by both sides, the two countries will further expand these projects such as the natural gas, coal, refined oil trade and railway construction, the bank cooperation projects. (Zhou Tao) （Translated by TLRHVC）
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