Mongolia’s prime minister Oyun-Erdene Luvsannamsrai voiced his support for the new plan to cap a single investor’s shareholding at 34% and allow the government to take shares in companies mining strategic deposits without compensating their owners.
Meanwhile, foreign investors in the mining sector raised concerns that the new rules may deter investment in critical minerals production in the country. In turn, the prime minister argued that this will ensure the Mongolian people benefit from the country’s substantial resources, Bloomberg reports.
“The Government of Mongolia remains committed to maintaining a stable legal environment for a thriving minerals sector which delivers significant financial returns for our investment partners,” Oyun-Erdene said.
Previously, a single investor could own as much as 66% of mining assets which was reduced to just 34% under new legislation. Along with changes to ownership structure, Mongolian lawmakers have adopted a new Sovereign Wealth Fund Law to fund economic development and welfare.
“The main intention of the amendments is to tackle the oligarchic concentration of financial gains from within this vital industry. Currently much of the wealth sits in a small number of hands,” the prime minister said.
Mining represented 28% of Mongolia’s GDP last year and comprised 92% of all exports, mostly to China. The country has vast resources of coal and copper, but its subsoil riches, including rare earth elements, still remain largely untapped.
Theodor Lisovoy, Editor in Chief, Rough&Polished
