A local newspaper reported that Oyu Tolgoi LLC, the developer of the giant copper deposit, is currently not allowed to use the ground water in the Gobi Desert.

Parliament passed the Natural Resources Use Fee Law in 2012. The Law of Mongolia on Fees for Use of Water and Mineral Water was consolidated with other laws on the use of natural resources. It was replaced by the Law of Mongolia on Natural Resources Use Fee on 17th May 2012.  The law sets the fees payable for the use of water by mining operations as calculated on a cubic metre basis. Depending on the type of activity a fee is payable on the basis of a percentage of the intrinsic environmental value of the resource.

But Oyu Tolgoi LLC failed to pay their fees for the usage of water on their site. A working group lead by the Deputy Governor of Umnugovi aimag, R.Seddorj, delivered a note insisting on payment of the fees for water usage over time in April. Oyu Tolgoi LLC however ignored the notice. Last Friday the local administration therefore authorized the decision to block the water supply that is used in the Oyu Tolgoi project until the company pays the required fees for water usage.

Oyu Tolgoi LLC has a debt of 2.9 billion MNT to Umnugovi aimag only for the usage of water according to law.

Under the Water Law, the Government has the authority to determine the intrinsic environmental value of water resources for each region or river basin. Currently, governmental resolution 302, dated 26th October 2011, sets out the intrinsic environmental value per river basin in amounts ranging from MNT 800 to MNT 2651 for surface water and MNT 1510 to MNT 9440 for sub-surface water. The fee will be payable on a monthly basis and the user must also submit an annual report for water use fees.

These fees are still two times cheaper than those an ordinary civilian pays for water usage.