The Standing
Committee on the Economy yesterday decided 13-3 to send the draft law on graduated
royalty rates to Parliament for discussion. The amendment to the Mineral Law is
expected to bring about MNT 80 billion to the state budget annually. Discussing
the whole issue of mining taxes, MPs feared that if the same rate of taxes
applied to profits from selling ore, concentrate and refined products, miners
could opt to export more raw minerals. Some also noted the unfairness in asking
Erdenet factory to pay windfall profits tax, while exempting Oyutolgoi, Boroo
Gold and Nariin Sukhait from it. There were also complaints that how the income
from the royalty would be spent had been left unclear.

The Finance
Minister explained that collecting royalty would be easy and would also put
less burden on companies than the 68 percent windfall profits tax. The royalty
rates will rise from a basic five percent to a maximum ten percent as prices rise
in the global market. MP Ya.Batsuuri proposed to raise the minimum royalty rate
to 7-8 percent.