July 24, 2008

Over a Quarter of Mongolia Covered By Mineral Licences

Excerpt from report in English by Mongolian newspaper The UB Post website on 24 July

[by B. Bulgamaa]

Thursday, 24 July: Twenty-eight per cent of Mongolia is covered under exploration and mining licences, research by the Open Society Forum shows. Licence numbers during the last seven months has increased by 356 as of June 2008, and there are now 4,717 exploration and mining licences issued compared to the 4,361 issued in November 2007. The number of licences increased by 73 for mining and 66 for exploration during the month of June.

Twenty-two per cent of the total 4,717 licences are for mining and 78 per cent for exploration. East Gobi, Selenge and South Gobi are the aymags [provinces] with the highest concentration of licences, while Gobi-Sumber and Orhon are the aymags with the lowest.

In Gobi-Altay, the ratio of mining to exploration licences is one to 16, which is the largest. On average, this ratio stands at one to five. With the issuance of 122 mining licences in the territory of Ulaanbaatar, it becomes third in number after the Central and Selenge aymags.

Four hundred and sixty-two or 44 per cent of the 1,060 mining licences for the Ulaanbaatar territory are for gold mining. Also dominant are licences for construction materials such as coal, fluorspar and iron. Major companies with the largest land areas under mining licences are listed below. From among them, coal mining companies have the largest mining areas. [passage omitted]

As for the combined total area under mining licences, Energy Resources and Gatsuurt are top among local companies. [passage omitted]

From among the top local companies with the largest number of gold mining licences, Gatsuurt with 24 licences and Jump with 17 are leaders. During the last six months, the number of licences owned by Erel and Buurgent decreased by three each.

An exploration licence is usually awarded to a territory with a large land area. Out of over 43.8m hectares of land under licence, over 43.3 million belongs to exploration licences.

The Geology Department of the Mineral Resource and Petroleum Authority holds the licence for the largest area, which keeps 55 licences covering 5.2 million hectares of land. Ivanhoe Mines and Gobi Coal and Energy are the leading companies in terms of size of area under exploration licence, having over 2 million hectares each. The combined land area held by these two companies is a bit larger than the territory of the Selenge Province. [passage omitted]

From among local companies, Bulgan Gold and Sodgazar are companies with licences to explore the largest land areas. Four hundred and sixty-two or 44 per cent of these 1,060 mining licences are for gold mining [all presumably in Ulaanbaatar, see above]. Also dominant are licences for construction materials such as coal, fluorspar and iron. [passage omitted]

Hanbogd Soum of South Gobi and the Ulaanbadrah Soum of East Gobi are the soums with the largest land areas under exploration licences. The first 10 soums in this classification are all from the Gobi region with six soums in South Gobi and three in the East Gobi .

Companies that hold mining licences in Mongolia represent 30 countries. Holders of the overwhelming majority, i.e. 3,092, of licences are companies registered in Mongolia. This number constitutes two-thirds of all licences.

China, the British Virgin Islands and the Russian Federation all have companies owning the largest number of licences. Also noticeable is that companies registered from an island considered a tax "haven" own about 12 per cent of all licences.

As presented above, the total area covered by licences is 43.8m hectares; 49.3 per cent of this belongs to licences owned by companies registered in Mongolia. The remainder is held by foreign companies. Companies registered in "tax haven" countries occupy about 27 per cent of the total land area held by countries owning licences.

Originally published by The UB Post website, Ulaanbaatar, in English 24 Jul 08.

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