Zorigt: profits from mining industries are distributed evenly among the people
For the 90th Anniversary of the Mongolian mining industry, there have been many events celebrating this occasion; with Mining Mongolia 90 being the lead conference. During this international conference, the Mongolian mining industry reported 90 years of its operation, and in addition to analyzing its achievements, Mining Mongolia 90 discussed the future development of the mining industry. The following is an interview with D. Zorigt, the Minister of Mineral Resources and Energy on the results and conclusion of Mining Mongolia 90.
-Tell us your opinion of the Mining Mongolia 90 International Conference.
-This event can be considered the opening ceremony for the 90th Anniversary of our mining industry. We will celebrate the anniversary until the end of this year. The foundation of Mongolia’s mining industry was set when mining operations begun in the Nalaikh coal mine.
For this occasion, we discussed the difficulties faced by the sector. Since its creation, the mining industry has become a major part of our economy. We have become more aware of the importance of public awareness of our mining industry and we need to find more ways for the public to contribute to its development.
-You seem to agree with the idea that the Mongolian tax system is disorganized. How should this be resolved?
-We must compare the Mongolian tax system with tax systems of other countries. For Mongolia, there is value added tax, personal income tax, customs and business taxes. All these taxes and fees need to be better organized. Otherwise a when a large amount of money is taken for taxation, suspicions arise on the whereabouts of the money.
-How should we duplicate how taxes are managed in Mongolia?
-The Ministry of Finance is holding discussions on this problem with other countries that have duplicate taxes. There are many controversial issues concerning this. Previously, we implemented a duplicate tax to attract and award bonuses to foreign investors, but we have since reached the conclusion to cancel it.
-The issuing of special permissions is also in disarray. How can this be solved?
-In the past four years, the issuing of mining and exploration licenses in Mongolia has relatively decreased.
-So is Mongolia’s mining industry generally organized and in order now?
-The number of permits and the territory issued by the permits are decreasing, while the contribution from the mining industry to the State fund is increasing. We are always accused of taking and eating up all the money generated from mining operations.
But the truth is that the mining industry is greatly accelerating Mongolian economic growth. A trillion and 800 billion MNT provided by the Mongolian mining industry is being distributed to the people. The whole of mining sector is working to make sure that this money continues to be distributed.
Foreign investments in Mongolian mining quadrupled in the past four years. This just goes to show its strategic importance to the Mongolian economy. So I don’t think any controversies will go around the mining sector. We can also not deny that issues regarding the mining industry may turn into a personal war between certain individuals.
-Many countries today strategize development by focusing on their mining operations. It feels like this idea has arrived in Mongolia. What do you think?
-There are many countries developing in such way. The best examples would be the US, Norway and Canada. Like them, mining is speeding up our economic growth. Yet we should be careful to not make the wrong decisions and go in the completely wrong direction. For example, the Government should pay more attention to the relationship between the mining industry and the environment. Mining companies themselves need to realize their responsibilities.
-What is the current situation on human resources for mining?
-For Mongolians, it is more profitable and preferable to work in Mongolia’s most powerful sector. It is inevitable that jobs and wages will increase gradually. With the growing and expanding of the mining sector, other sectors will follow. But with this, there are rumors spreading of Mongolia’s minerals being loaded out of the country by its powerful neighbors. We should pay more attention to what we’re doing in Mongolia instead of talking about other countries. But not only do we accuse other countries for wrongdoing, we tend to accuse of each other of wrongdoings. That is not true. The profits we make from the mining industry are distributed evenly among the people.
-Tell us your opinion of the Mining Mongolia 90 International Conference.
-This event can be considered the opening ceremony for the 90th Anniversary of our mining industry. We will celebrate the anniversary until the end of this year. The foundation of Mongolia’s mining industry was set when mining operations begun in the Nalaikh coal mine.
For this occasion, we discussed the difficulties faced by the sector. Since its creation, the mining industry has become a major part of our economy. We have become more aware of the importance of public awareness of our mining industry and we need to find more ways for the public to contribute to its development.
-You seem to agree with the idea that the Mongolian tax system is disorganized. How should this be resolved?
-We must compare the Mongolian tax system with tax systems of other countries. For Mongolia, there is value added tax, personal income tax, customs and business taxes. All these taxes and fees need to be better organized. Otherwise a when a large amount of money is taken for taxation, suspicions arise on the whereabouts of the money.
-How should we duplicate how taxes are managed in Mongolia?
-The Ministry of Finance is holding discussions on this problem with other countries that have duplicate taxes. There are many controversial issues concerning this. Previously, we implemented a duplicate tax to attract and award bonuses to foreign investors, but we have since reached the conclusion to cancel it.
-The issuing of special permissions is also in disarray. How can this be solved?
-In the past four years, the issuing of mining and exploration licenses in Mongolia has relatively decreased.
Before, nearly 45% of Mongolian territory had lands which required special permissions to access them, and this number has been decreased to merely 13%. There were over 7,000 licenses and now there are around 3,000. We are taking action step by step, and mining companies are beginning to send in their reports on time specified by policies. We have started nullifying companies’ licenses if they did not send their reports on time.
-So is Mongolia’s mining industry generally organized and in order now?
-The number of permits and the territory issued by the permits are decreasing, while the contribution from the mining industry to the State fund is increasing. We are always accused of taking and eating up all the money generated from mining operations.
But the truth is that the mining industry is greatly accelerating Mongolian economic growth. A trillion and 800 billion MNT provided by the Mongolian mining industry is being distributed to the people. The whole of mining sector is working to make sure that this money continues to be distributed.
Foreign investments in Mongolian mining quadrupled in the past four years. This just goes to show its strategic importance to the Mongolian economy. So I don’t think any controversies will go around the mining sector. We can also not deny that issues regarding the mining industry may turn into a personal war between certain individuals.
-Many countries today strategize development by focusing on their mining operations. It feels like this idea has arrived in Mongolia. What do you think?
-There are many countries developing in such way. The best examples would be the US, Norway and Canada. Like them, mining is speeding up our economic growth. Yet we should be careful to not make the wrong decisions and go in the completely wrong direction. For example, the Government should pay more attention to the relationship between the mining industry and the environment. Mining companies themselves need to realize their responsibilities.
-What is the current situation on human resources for mining?
-For Mongolians, it is more profitable and preferable to work in Mongolia’s most powerful sector. It is inevitable that jobs and wages will increase gradually. With the growing and expanding of the mining sector, other sectors will follow. But with this, there are rumors spreading of Mongolia’s minerals being loaded out of the country by its powerful neighbors. We should pay more attention to what we’re doing in Mongolia instead of talking about other countries. But not only do we accuse other countries for wrongdoing, we tend to accuse of each other of wrongdoings. That is not true. The profits we make from the mining industry are distributed evenly among the people.
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