Amongst Asian countries, Mongolia ranks as one of the richest in terms of volume and variety of undeveloped mineral resources. Although enormous potential exists in mineral resources, the economic viability of developing much of this natural wealth has not yet been demonstrated. The mining sector is of great importance for Mongolia’s economic stability and for the physical infrastructure, especially in the energy sector which is heavily dependent on coal. Mongolia has witnessed an increased interest in the mining sector, as well as in copper production. In recent years, foreign companies have found a somewhat improved environment for investment. It can make a contribution to the sustainable development of Mongolia. But regenerating the land after mining extraction has been sluggish. Statistics from the Ministry of Environment show that of the 331 Mongolian and foreign invested mining companies, and of the 13718.5 hectares where mineral extraction has occurred, only 2553.2 hectares land have been regenerated. This means there has only been 18 percent of regeneration as of November 2007. Land which has not been regenerated reached 11200.0 hectares. Since 1999, 120 to 130 gold mining sites have extracted and 276 million meters have been excavated until now. As of October 31, of this year, 1038.3 hectares are expected to be extracted by 152 mining companies. They have planned to regenerate 862.02 hectares and 937.9 hectares as technical and biological regenerations, respectively.
Even today, the Minerals and Petroleum Authority for the Ministry of Industry and Commerce has taken over 2500 mining licenses which allow exploration and extraction of 40 million meters by mining companies - that’s 25 percent of Mongolian territory. In past years, many people had a false conception that anybody could do exploration and extract from the land, so big businessmen went mining. Mongolia has cracked down on enormous numbers of ninja gold and sparring miners who used to make a living by scavenging for gold and sparring, using chemicals. As a result, this has caused serious environmental damage.
The answer to using natural resources and minerals responsibly is to develop a mining plan in Mongolia. In recent years, this has become a positive trend. Parliament members and high ranking officials, specialists and officials of the Minerals and Petroleum Authority, mining companies and a group of reporters have been paying official visits to foreign countries where the mining field is highly developed. Through this, they can learn skills from others’ experiences in mining. In order to develop mining, the right information is important. The Asia Foundation has supported opportunities to study in the U.S. states of California and Colorado.
Recently, representatives of some mining companies visited Bugat and Ordos metallurgical plants and gold mines in Inner Mongolia to become acquainted with modern mining and metallurgical plants. It should be mentioned, if the mining sector develops in the right way, this will have a positive impact on the development of the Mongolian economy. If mining develops the wrong way, it will bring a collapse to the ecological and natural systems of the country.
Last November, Tg542.6 million were collected according to law, from mining companies who defaulted on their obligation for regenerating sites. Interestingly, one of the factors that is helping Mongolia’s economic growth is the surprising rate of direct foreign investment. According to a survey by the Ministry of Industry and Trade, from 1990 to 2006, 6,165 foreign invested companies from 93 countries were registered, with a total direct investment of about US$2 billion in the country. 47.7 percent alone are invested in the mining sector from China, Canada, South Korea, Australia, Russia and Japan.