Mongolian Mining Forum at PDAC 2018

By Bulgan B

Mongolia has made a tradition of sending a delegation to PDAC every year in the last 8 years (at least this is as far as I recall).  Although, the odds of the same minister of mining attending the conference might have been very slim given the changes in Mongolian Government. Regardless of the changes of faces, the objective of the event is to attract investment to Mongolia. So, hitting the right notes is important in an environment like PDAC where many countries are making a concerted effort in attracting the same investment. This year Chile, Peru, and Ecuador sponsored PDAC – showing that the event has become the international thing.

Unlocking Mongolia’s Potential

The Mongolian Mining Forum’s agenda was named “Unlocking Mongolia’s potential for investors and developing partnerships for economic development.” Although, given that it was the first day of the official opening of PDAC and there were many other events simultaneously taking place, the function hall was full. I take that a good sign and an interest because it was not easy to find any program agenda on the internet except the Xanadu mining’ tweet came in handy although might have been the draft version of the program as there are changes to the program at the actual event.

Government Perspective

In terms of content (skipping the pleasantries of opening remarks) Mr. Munkhbileg Namsrai, Mineral Resources, and Petroleum Agency of Mongolia showed geoscience mapping of Mongolian resources. He also shared that the Agency’s website is hosting geoinformation database which includes over 1300 state-funded geological reports and their intention to start private funded exploration.

Gold occurances in MGL. We are literally sitting on the gold. #MongoliaPDAC2018 #PDAC2018 pic.twitter.com/yrfN428bGR

— Bulgan Batdorj (@tsasmusus) March 4, 2018

The presentations by OT Country Director Munkhtushig Dul and Erdenes Mongol LLC CEO Tumentsogt were rich in information on where they are, and where they plan to go. Erdenes Mongol LLC shares that it is fated to manage the Mongolian Sovereign Wealth Fund. There were discussions of what this meant in the wider circle of Mongolian audience.

Mongolia and Canada

Moving on to the presentation by the Mining Suppliers Trade Association of Canada, Mr. Ryan McEchearn spoke on the mining cluster approach and stimulated a lot of interest in the Mongolian audience. Member of Parliament, Dr. Undraa Agvaanluvsan requested to learn how the cluster approach would match Mongolia’s development pursuit based on its mining industry.

A match made in heaven? Canada and Mongolia on mining. #PDAC2018 #MongoliaPDAC2018 pic.twitter.com/vSexZb2MKe

— Bulgan Batdorj (@tsasmusus) March 4, 2018

The following session on Improving mining industry performance was moderated by  Mr. Jargalsaikhan Dambadarjaa. His panel included the Minister of Mining, Member of Parliament, Canadian Ambassador, CEO of the Mongolian Stock Exchange and Business Council of Mongolia. Mr. Jargalsaikhan touched upon a variety of questions ranging from “trust” to “tax”. The Canadian Ambassador, Mr. David Sproule shared that transparency and consultation were important for not only attracting but also maintaining the flow of investment in the country, making reference to the recent change to the income tax in Mongolia. The undercurrent of the panel was the issue of changes to the taxation in Mongolia. The Minister of Mining, however, was well grounded in his response on this hot topic of taxation. He reflected upon the process of policy making and budget making and how the budget making is not a consultation process at the parliament but rather a binary process either to approve or reject. He also mentioned that on January 5, 2018, the government passed legislation to stream the 30% of the royalty to the local governments which could change the nature of the industry’s engagement with the local governments. Minister D. Sumiyabazar did handle the hard questions with ease. It is an interesting comparison to Marissa Smith’s post covering the World Economic Forum in January 2018.

The event concluded with Altan gadas (polar star) medal to Mr. Matthew Wood, Executive Chairman of Steppe Gold Ltd for his contribution to the development of Mongolia. In the audience, there was another foreigner who holds the “Friendship” medal amidst longtime friends of Mongolia. These are the descriptive accounts of Mongolian Mining Forum 2018 at PDAC.

“Welcome Back” to Mongolia, Particularly for Junior Mining Companies

The mining industry is picking itself up from the ground and dusting itself off. It is a good sign for Mongolia to join the marathon and improve itself. Mining is a package deal, we can not separate its positive impacts from the negative ones. However, Mongolia can mitigate those negative ones and catalyze the long-term development through the benefits from the industry. First and foremost, to optimize the country in mining, we need to start taking the junior mining companies seriously. Those strategic deposits and megaprojects are in their own bubbles of complications, however, without a serious relationship with junior companies, we will not move forward.

In summary, the key message of the event was “welcome back” to Mongolia. The Mongolian government has presented a progress through legislative reform in mining, an openness of geoscience data and economic (and political of course) interest to welcome investment. Although, like any maturing democracy, it has and do not hide its challenges with policymaking, such as the case of a recent change in taxation.  However, both mining industry and government of Mongolia should and could work to get the best out of this “boom” ride.

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