D.Batkhuyag, Head of MRA: License issuance suspension is better to be continued

As of February of 2009, 5187 companies were conducting exploration works in 48.2 million hectare area of Mongolia, but as of October 5 2010, it has decreased almost twofold, down to 26.5 million hectare (16.9% of the Mongolian territory). MRA wanted to reject hearsay of that over 90% of the Mongolian territory went into the hands of foreigners. 3114 licenses were issued for 26.5 million hectare areas. MRA increased its measures and cancelling 53 licenses of 39 companies, because of their annual report failure to meet with the minimum expenditure stated in the law.

1139 companies are holding mining licenses, but numerous of them are suspended their operations due to funding, exhaust of reserve and degrade of technology.

MRA will hold calculation on the areas under the mining operations. After this calculation, the mining recovery work ratio will become much clearer. MRA established a new department in charge of coal sector, because coal sector has been developing intensely in recent years. In 2009, Mongolia mined 13.1 million tons of coal and 6 million tons went to energy production in Mongolia and remaining was exported. But this year, 16 million tons of coal was exported.

During open day of Mineral Authority of Mongolia, Mr. D.Batkhuyag, Head of the Mineral Authority of Mongolia answered several questions put by journalists.

Q: There is criticism over the implementation and law enforcement of the Law on Prohibition of Exploration and Mining operations in the water and forest reservoir areas. What do you do toward enforcing the law?

D.Batkhuyag: Within the framework of enforcement of this law, operations of 1782 companies in 18 million hectare area would be terminated. The main advantage of this law is to set the boundary of water source, stream and water and forest reservoir areas. The main hindrance of the implementation of the law is the refund budget. 7.1 trillion MNT is required for the refunding. The Government shall adopt special regulation on the refunding. Of course, mining companies will try to get as much refund as possible. The Government will pursue to minimize the refund. Therefore, in order to find its “golden medium”, we need independent monitoring.

Q: Artisan miners’ issue has become critical in many aimags. What measures were taken by MRA towards it?

D.Batkhuyag: It can be explained in connection with the above mentioned question, if we let the companies out of their licensed areas, artisan miners will replace them easily. Regulations and sanctions on such acts are not clear until now. If we don’t pay attention on this, the Government might face the situation to be neglected by artisan miners so called “ninjas”.

Q: What policy the state pursues towards artisan miners? What measures are necessary to be taken?

D.Batkhuyag: The Mineral Law shall be amended. But our agency is not the subject to initiate the law. A working group on amending the Mineral Law was established next to the President. Also, MP are initiated a draft law. We are sending our comments and findings to these drafts.

Q: A new coal mine was explored in Dornod aimag. Do you have any info to share with us?

D.Batkhuyag: Tethys mining company reported that it found 3 billion tons of coal reserve. But we rejected its report, because of incomplete report and geological study. After the completion, the Mineral Wealth Professional Committee will register its reserve.

Q: The license issuance was suspended until December 1 2010. This due date is closing, what will happen next?

D.Batkhuyag: Last April, the President made proposal to suspend the license issuance because it put the national security into the risk. We have position to continue this suspension. Only thing is that in which extent the license issuance reached to the level of putting the national security into risk.