For too long the Mongolian mining story has focused on Rio Tinto and little else. Through its joint venture with the government, it will deliver the third largest copper mine in the world- a project that could contribute as much as 30% of the country’s GDP. With billions spent and committed, it’s little surprising minds have fixated on this project.
Mongolia is a landlocked and sparsely populated nation in Central Asia, wedged between Russia and China. The country was a Soviet satellite state until 1990, when it began its transition towards democracy and a market economy. The first years of this transition were difficult for Mongolia; the country was dependant on Soviet financial assistance and its economy primarily based on animal husbandry and nomadic herding. Economic collapse saw rampant inflation, food rationing and widespread shortages.
Companies in or considering getting into the Mongolian mining industry need to be aware of new changes in procedures for obtaining a license for minerals exploration. Recent changes to exploration license legislation facilitate:
Mongolia’s gold industry is expected to see a major boost in 2018, with the Oyu Tolgoi mine set to double its output to between 240,000 to 280,000 ounces. As Oyu Tolgoi enters its later phases, higher grades and increased recovery will significantly enhance the projects capacity. This will further propel the recovery of the Mongolian economy.
While coal was Mongolia’s top performing commodity in 2017, Mongolia observers predict copper to steal the show this year. As a resource-based and export-focused economy, the outlook for Mongolia is strongly influenced by global market movements. These look set to crown copper as the country’s top earner.
In 2017, Mongolia’s coal deposits helped the country move to recovery. Often associated with toxic emissions- and in Mongolia’s case, chronic air pollution- it was instrumental in the delivery of growth exceeding 5%. The reasons are well documented and understandable. Even with more muted industrialisation, China is a key steel producer and relies on coal to power its mills. As my colleague recently reported, though, Xi Jingping and others are genuinely making green overtures, and this led to the closure of hundreds of mines in Inner Mongolia last year. Combined with a ban on North Korean imports, this placed Mongolia as a key exporter.
Mongolian Metals Corporation LLC (MMC) is a Mongolian mining company with a portfolio of exploration licenses representing significant deposits of copper, gold, molybdenum, coal and quartz across four aimags of Mongolia. The company also benefits from strong ongoing access to further license acquisition opportunities. MMC is a spin-off from Asia Pacific Investment Partners. MMC was founded in April 2008 and has to date acquired four exploration licenses in Mongolia. Aggregate investment into MMC since at 31st December 2008 totaled circa US$6.4 million. Investment into the business has to date been 100% financed by Asia Pacific Investment Partners Corporation Ltd (APIP).