Source: Reuters                            Date: 21 September, 2011

The ban on license issuance continues to frustrate foreign investors and Mongolians who would like to press the mining boom even further. The ban imposed in 2009 is due to expire at the end of the year, but Parliament could extend the band if it so chose. The law for the protection of rivers, lakes, and forestry suspended nearly 2,000 licenses, but the government has lacks the resources to fully enforce the suspension.Dozens of projects have been shut down, while hundreds more operate but in a state of legal limbo. The suspension was ordered by President Ts. Elbegdorj until the government can better define what areas need protection from mining operations. Although forcing firms are interested in Mongolia's vast untapped resources, legal and political uncertainties leave some hesitant to invest."Is Mongolia the place to be, or is it Colombia?" asked Bernard Guarnera, president of mining consultants Behre Dolbear. "We vote Mongolia, but mining companies have to make a decision based on certainty and stability.

The government should have worked with the Worldwide Fund for Nature (WWF) to define the boundaries for mining operations, said Chimed-ochir Bazarsad, the WWF representative to Mongolia. He said his organization attempted to map out the ecologically important areas that need protection for watershed, biodiversity, and cultural values, but the work was never finished without government support. Now, however, all the prohibited areas are determined through government negotiations with firms without that information.Communities have taken the law into their own hands, taking rifles to illegal “ninja” miners willing to mine in prohibited areas. Unfortunately, the battle between enterprising artisan miners and protectors of the environment does not give investors the image of a stable political environment.Mongolia has the unfortunate reputation for repealing laws shortly after its introduction, giving rise to the common saying, “Mongolian laws live three days.” While some would like the law suspending licenses to repeal, environmentalists say it is more of the same reckless behavior from government. Some believe foreign mining firm executives are gaining too much influence in Mongolian politics too.