Parliament
yesterday discussed draft laws relating to mining. One, developed by MPs
D.Gankhuyag and Z.Enkhbold, was not approved, with 62.8 percent of MPs voting
against it, while another, initiated by MPs N.Batbayar and S.Byambatsogt got
the support of 75.6 percent to be forwarded to the Standing Committee on the Economy
for the next stage of discussion. Another draft, restricting issue of  mining exploration licenses, submitted by President
Ts.Elbegdorj, was also sent to the standing committee.

The
two MPs who had prepared the first draft said their intention was to ensure that
an exploration license holder made proper technical and economic estimates and
get these approved before making an investment agreement with the Government. Failure
to have the estimates will lead to forfeiture of the deposit. However, the
exploration expense will be reimbursed after it is calculated by independent
reviewers.

E.Bat-Uul
said the Government must not act barbarically like this. It would be like
robbing citizens who worked with foreign investors. Z.Enkhbold defended the
draft by saying strategic mines cannot be handed over without any conditions.

Gankhuyag
explained, taking Oyutolgoi as an example, that it has 45 million tons of
copper and 1,200 tons of gold. If another mine has 20 million tons of copper
and five tons of gold, will the Government demand the same 34 percent ownership
there too?  Ivanhoe Mines stands to earn MNT80
billion on an investment of MNT 5 billion and the draft, its joint initiator
said, seeks to ensure that mistake is not repeated.

This
failed to convince MPs who did not support further discussion on the draft. The
draft that they did wish to discuss more was also one that, its initiators
said, was based on the Oyutolgoi agreement experience. They wanted future
agreements on deposits explored with private money to be limited to 15 years.

Bat-Uul
opposed this, seeing no need to change the present practice of having 30-year
agreements, followed since the Mining Law was approved in 1996. Foreign
investors require long-term stability in the legal environment, and long-term investments
will benefit other sectors of the economy, too, he said. Most MPs did not
support his misgivings.

The
President’s draft to stop the grant of new exploration licenses was discussed
behind closed doors as it involved matters relating to national security. The
entire business of granting mining licenses has become chaotic, and the
President wanted this to be kept in abeyance until the whole issue was sorted
out. However, the working group that had discussed the draft suggested that the
ban on fresh licenses should not extend beyond 2010. The head of the group,
L.Gantumur, said without a deadline, the whole mining sector might collapse.

The
draft will now be discussed by related Standing Committees.