Mineral Resources and Petroleum Authority of Mongolia CURRENT

Mineral Resources and Petroleum Authority of Mongolia CURRENT SITUATION OF ASM IN MONGOLIA 6 th Annual CASM Conference November 11 th, 2006, Antsirabe, Madagascar Chuluunbaatar Enkhzaya

Current Situation of ASM in Mongolia § § § Mongolia at the Heart of Asia A Growing Mineral Sector MRPAM Artisanal and Small-Scale Mining Mongolian-Swiss Project “Sustainable Artisanal Mining”

MONGOLIA AT THE HEART OF ASIA

Mongolia § Location landlocked in NE Asia § Area 1 564 116 sq. km § Population 2, 6 Mio § Nationality, Language Mongolian § Capital Ulaanbaatar § Climate Continental, -/+ 30ºC § Literacy rate 96% § Economy Agriculture, Mining, Tourism, Service § GDP per capita 650 USD (2005)

A GROWING MINERAL SECTOR

A Growing Mineral Sector % 2002 2003 2004 2005 Of GDP 10. 1 12. 7 17. 3 18. 0 Of GIP 47. 3 49. 6 64. 7 65. 5 OF EXP. 56. 7 58. 9 70. 8 75. 8 CVRD, BHP Billiton, Rio Tinto etc.

Production of Mining sector Mineral products (6000 deposits, 80 types of commodities) 2004 2005 2006* Copper in concentrate, th. tn 130, 0 126, 3 130 Molybden in concentrate, th. tn 1140, 9 1153, 0 1160, 0 Cathode copper, tn 2376, 0 2474, 5 2500 Gold /chemical pure/, kg 18, 6 21, 9 23. 0 Fluorspar concentrate, th. tn 104, 8 93, 7 95, 0 Metallurgical fluorspar, th. tn 206, 7 233, 4 250, 0 Coal, th. tn 6794, 7 8255, 8 8500, 0 Zinc concentrate, th. tn NEW - 22, 8 Iron, th. tn NEW 33, 5 167, 7

MINERAL RESOURCES AND PETROLEUM AUTHORITY OF MONGOLIA

Mineral Resources and Petroleum Authority of Mongolia (MRPAM) § Implementing Agency of the Mongolian Government: policy in geology, mining, petroleum § 5 Offices: § Geological Survey § Mining Office § Cadastre Office § Petroleum Exploration Office § Petroleum Production Office § 2005: SAMU (responsible for ASM) within Mining Office

ARTISANAL AND SMALLSCALE MINING

ASM: Dissemination and Production § § Began in 1997, informal About 100 000 miners In 18 out of 21 Provinces 36. 7 mio. USD = 15% of GMP: § Gold (hard rock, placer) 1. 7 tn 24. 8 mio. USD § Coal 521 th. tn 8. 1 mio. USD § Fluorspar 51 th. tn 3. 4 mio USD § Gemstone, fossilized wood, mica, sand, gravel and clay

ASM: Positive Impacts and Problems § Positive Impacts § Creating Employment § Increasing Income § Supporting Local economy § Problems § Child Labor § Health & Safety § Environment § Other Resource Users § Criminality

ASM: A Comprehensive Strategy § Comprehensive Strategy: in process, within the National Development Strategy § Public Discussion and Hearing: National Forum on Mining, Regulation and Environment in May 2006 § Vision: controlled utilization of common resources for sustainable development with a pro-poor economic growth

ASM: An Integrated Approach § An Integrated Approach: § a formalised, profitable sub-sector of Mongolian economy, directly impacting the income situation of the population – especially rural population – contributing to local development and poverty reduction. § Developing ASM into a new, small and medium sized mining sector – small and medium-sized enterprises as one of realistic ways to diversify the rural economy § Legal framework: law draft submitted to the Parliament § Challenges and many open questions, e. g. : § Engaging all stake holders, especially miners (networks) § Commercialization for sustainable income (value-adding) § Conflict with other resource users, good governance etc.

“SUSTAINABLE ARTISANAL MINING” PROJECT

Sustainable Artisanal Mining Project § SDC - MRPAM Sustainable Artisanal Mining (SAM) since July 2005 § Goal: Artisanal miners are recognized as responsible members of a key economic sub sector contributing to sustainable rural development of Mongolia

Objectives § transparent and straightforward policy and regulatory framework § institutional structures and organizations at all levels § profitable and responsible mining and extended business activities § artisanal miners and other resource users: socio-ecologic management

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