Mining Leads as Mongolia Seeks to Diversify Economy

Mining Leads as Mongolia Seeks to Diversify Economy

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This month the Ministry of Mining and Heavy Industry hosts “Mongolian Minerals and Mining 2018” investment seminar, which will examine the state of the Mining industry in Mongolia and review specific opportunities in hopes of encouraging in new investment in Mining projects.

The Ministry hopes to emphasis public and private partnerships which will contribute to broader economic growth, increase employment and produce valuable products. Mining generates up to 90% of current exports from Mongolia and up to 25% of government budget revenue. Specific projects presented at the seminar along are expected to grow the Mongolia economy by at least 15%.

Under new provisions added to the Law on Minerals, Mongolia is implementing this year a new system whereby mining licenses are approved and issued exclusively via a tender process. This is the first year of the new system and licenses are expected to be formally issued in April.

But Mongolia is not relying only on Mining to sustain economic growth. The “Opportunities in Mongolia” forum was held at the Mongolian Embassy in Beijing this week. The forum brought together Mongolian business and Government officials and Chinese investors and representatives from over 100 Chinese companies. Chinese investment in Mongolia is said to have increased by 34% in 2017, and Mongolia looks to continue gains in 2018.

Also, this week the Mongolian Ministry of Finance signed an agreement with the International Finance Corporation in hopes of improving Mongolian agricultural exports. The agreement on trade facilitation reform will help to educate Mongolians as to the regulations and procedures required for exports of products, as well as smooth regulations and red tape that make trade between countries more difficult. Mongolia hopes these efforts will increase agricultural exports by creating a more favorable legal environment.

Mongolia is also making efforts to build its indigenous cashmere crafting expertise into a major global export industry with a new program whish is expected to support nearly 9,000 jobs in the cashmere sector by 2022. Exports of cashmere are also expected to increase.

Finally, the Economic Research Institute, the Central Bank of Mongolia and the National University of Mongolia held a forum on the Mongolian economy this week reviewing the current state and future trends of economic growth. The forum emphasized that Mongolian exports exceeded USD 6 billion in 2017 for the first time. Also of note, Foreign Direct Investment in Mongolia totaled over USD 1.2 billion. The experts present at the forum endorsed the government’s plan to diversify the economy away from a reliance on mining exports.

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