Source: Business Council of Mongolia                 Date: 14 September, 2011

Over 1,000 investors and industry professionals attended Discover Mongolia, Mongolia's largest mining conference. The last day of the event featured technical discussion regarding infrastructure and methodology, in addition to a panel discussion with members of the Mongolian government.

The day began with a number of investment project pitches from mining firms. Investment projects included Erdene Resources, Prophecy Coal, Voyager Resources, WM Mining Company, Origo Partners, Altan Rio Mongolia, Erdenejas, and Xanadu Mines.

The rest of last Friday morning consisted of announcements and reports from Mongolian officials on various infrastructure projects. These included delivering electricity to towns throughout Mongolia, and the construction of roads and railways. Mongolian officials plan to have a 1,500 megawatt thermal power station by 2025 in the southern Gobi region. Currently 90 percent of the electricity in Mongolia comes from the central grid originating from Tuv Aimag. Until 2025, Mongolia can rely on natural gas and liquefied natural gas imports from Russia. For transportation, the Mongolian government plans to build 49,000 kilometers of road and 5,000 kilometers of rail. The road construction projects will consist of seven different programs to construct roads in the countryside to link provinces to Ulaanbaatar, in the city to reduce traffic, in addition to roads that lead to the Russian and Chinese borders.

The conference ended with a final panel discussion from representatives of various agencies of the government related to the mining sector, including the Mongolian Mineral Resource Authority and Ministry of Nature, Environment and Tourism. The majority of questions revolved around the Law on the Prohibition of Mineral Exploration in Water Basin Areas and Forest Areas and the activities of illegal artisan miners. The aforementioned law was established to protect rivers and forestry from destruction by mining operations. As a result of the law, 240 mining licenses were revoked with compensation from the government. However, many speculate that ninja miners will resume mining activity without any regulation from the government. These enterprising miners are breaking Mongolian law, but little is done to stop them. The government recommended local government and communities step up to take a role in the halting of their activities. The government is also considering professionalizing independent miners so they can follow regulations and become aware of the laws.

In addition to vehicular means of transportation, Jane Chen, a senior process engineer at Brass Engineering International, introduced the methods for the transport of mineral slurries through a series of pipelines. The advantages of such a system include low maintenance, zero pollution, low cost installation, and the transport large volumes of minerals. Minerals such as coal would travel through the pipelines in water.

The panel also discussed taxation and future licensing in Mongolia. Members of the panel insisted that taxation, which stands between 10 and 25 percent in Mongolia falls below the global average of 33 percent. The panel could not speculate much on whether licenses will once again be issued in 2012, however the law prohibiting their issuance is currently scheduled to expire in January next year. These issues are for Parliament to decide, said members of the panel.

The conference ended with some concluding remarks from Mongolia's first president, P. Ochirbat.

The global economy before now only had profits in mind with little mind paid to the environment, said Ochirbat. That phase is ending now and the economy is to be built in harmony with the environment.

The former president went further to encourage Mongolian businesses to increase their own capacities, and improve corporate responsibility and transparency. To foreign firms, he said in addition to the government's issuance of licenses foreign, companies need to earn social license and acceptance from the communities near the sites they excavate for minerals.