One-fifth of Mongolia to be opened for digging

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Mining industry executives expect new mining boom in Mongolia. It is going to start very soon. It will open about 21% of country’s territory. Which is more than one-fifth, in order to explore its mining potential.

Mongolia goes through financial IMF-led bailout. And it currently removed the main obstacle of $5.5 million which was affecting its economy. It was a Mongolian banking law, that had required big companies to refer their sales revenues from foreign investments through Mongolian banks. Later it made a proposal to explore wider area of Mongolian territory.

 

Reforms

 

Reform, followed by further steps, all in order to open the mining sector, would definitely see the industry & investment grow.

“It is an important thing for Mongolia as a whole. I think the reaction and the commitment you are seeing from the Mongolian government over the last two weeks to repeal this tax, it shows its firm commitment to really get the foreign investments going and particularly that is very much settled on the mineral exploration and the mining industry in Mongolia.” Andrew Stewart, CEO of Xanadu Mines said.

By some CNBC reports, Stewart also spoke about Xanadu’s flagship Kharmagtai project. Its location is 120km south of Oyu Tolgoi. And it demonstrates that Mongolia offers increasingly favorable odds for discovering significant copper and gold deposits. When compared to mature mining jurisdictions, for example Canada & Australia.

IMF data shows that the economy only grew 1 percent in 2016 from 2.4 percent in 2015.

 

Numbers

By exploration, and Mongolian government efforts given in the mining potential, the country can meliorate its economy. Rise its GDP and of course the economic security which follows. Dashdorj was said to have remarked that the landlocked country bordering China and Russia and among the top 20 countries by landmass needs to take the step to resolve economic woes that go back several years.

Encouraging exploration is crucial for the healthy mining industry. When government gives the effort in structural changes in the industry there exists a great platform on which country can establish its capacities.

 

Mongolia’s growth in 2H17 and 2018

Mongolia’s growth will definitely accelerate this year. Supported by these huge mining investments. Info are coming from Asian Development Bank and its 2017 Outlook report. The forecast says growth will accelerate 2.5% this year, but will be around 2% in 2018. Followed by the base effect of upsurge in coal production in 2017.

This is based on the assumption that investment in the second phase of Oyu Tolgoi mine will rise from $200 million last year to $1 billion in 2017 and $1.2 billion in 2018.

While Oyu Tolgoi is Mongolia’s highest profile mining operation, the country plays host to a number of the copper, gold and coal mines.

Mongolia is a country richly provided with mineral resources.  The Erdenet Copper Mine has been operating for several decades and the indications are that there is still a number of decades of mine life to come.

 

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