The office of the President of Mongolia, Public Relations & Communications Division


Responsible Mineral Development and Transparency issues Discussed at the Citizens’ Hall

During the Mongolia Economic Forum, the second roundtable meeting on “Responsible Mineral Development”—jointly organized by the Office of the President of Mongolia and the World Economic Forum—was held at the Citizens’ Hall under the Office of the President on March 3-4th, 2011.

Our President Ts. Elbegdorj began the event with the following opening remark:
“Friends and specialists who have gathered here today, it has been a while since we have started working with the World Economic Forum and I am happy to see our joint effort is beginning to show its results. According to the information I received, since the launch of our Model Mineral Development Agreement Initiative, some 200 pages long Model Mineral Development Agreement has been created since the launch of the initiative in June 2010, where various ideas and proposals regarding how to develop the minerals sector in a way that countries rich in mineral resources can utilize their mineral resource in the most efficient way.
Since the launch of the Model Mineral Development Agreement Initiative, various countries aiming to develop their mineral sector have received experts and researchers involved with the project, where a number of discussions, interviews and research activities were held as the preparation for creating the Model Agreement.
Taking this opportunity, I’m pleased to express my appreciation to the founder of the World Economic Forum, Dr. Schwab, for supporting our project from the beginning. On another exciting note, Mongolia is becoming partners with the World Economic Forum on another major initiative called, Partnering against Corruption Initiative, the occurrence of which is not a mere coincidence. There have been more cases where countries with abundant mineral resources falling victim to resource curse than benefiting from it. Thus, supporting sustainable development and making the minerals sector beneficial to the people and the country’s development, while working in good cooperation with foreign investors, and making the government’s operations transparent to the public are some of the issues of utmost concern for countries such as ours.
More and more mineral development agreements are expected for Mongolia in this century. Therefore, the Model Mineral Development Agreement that the World Economic Forum has been creating is valuable for not just Mongolia, but for various others that have similar concerns as us. From the things I have just mentioned, you can see that joining the PACI and working with the World Economic Forum team is an important step for us in setting the basis for a successful and sustainable development, especially in the minerals sector.

Let me express my sincere gratitude on behalf of Mongolia, for those who have worked with steady efforts to make the MMDA possible, and wish you all success in the second roundtable meeting on “Responsible Mineral Development”.
After the President’s remarks, Senior Director of the Centre for Global Industries, World Economic Forum, Alex Wong, informed the participating audience that over the past several months, the World Economic Forum team did research in 12 countries who wish to take advantage of their vast mineral resource. Mr. Wong further stated that, “Today we are going to talk about Mongolia-specific problems and challenges, as well as transparency and responsibility issues within the minerals sector, while focusing on two issues: first is how to develop the minerals sector in the right way, as well as allocating the benefits of the sector fairly and transparently among all stakeholders; the second one is, based on the first, how to create businesses and surge employment in the country’s economy. Tomorrow, we will be discussing about transparency and corruption issues in further detail.”
Minister of Mineral Resources and Energy, D.Zorigt, also made a brief statement as well:

“Discussions by the State Great Hural and opinions of the civil society were taken into consideration, in the making of the Oyu Tolgoi Investment Agreement. We worked in conjunction with multiple sectors; therefore progresses have been made in the said agreement. The Oyu Tolgoi talk is an on going one and a number of articles within the Agreement are still open for amendment, and we are working to streamline them and the result is expected in the near future. At first, the feeling among us was such that only Mongolia is faced with such a daunting task as to complete a sound mining investment agreement. However, there are at least 12 countries who are dealing with the same challenge as us. So, after comparing the Oyu Tolgoi Agreement with theirs, I reached the conclusion that our Agreement is decent in comparison.

We are revising the Minerals Law at present with hopes to have it approved during the Spring Session of the State Great Hural. It’s important for us to incorporate the notion of responsible mining development that we have gathered here to talk about today. In order to identify “responsible mining businesses”, we must take into account the principles and conditions under which stakeholders are working.
Defining such criteria is of utmost important to us. Merely speaking in broad terms about responsible mineral development does not hold much meaning. We have invited NGO’s here today, so they have the chance to speak and share with us their opinion on the issues at stake.

We are quite willing to work with the World Economic Forum in developing the minerals sector of Mongolia, especially on creating a Model Mineral Development Agreement, principles of responsible mineral development, and setting the above-mentioned criteria. Equally important is conducting comparative study of various countries’ mining investment agreements.

So far, we are naming merely Canada, the U.S., and Australia and are praising their mineral laws and legal environment. However, a comparative study on what would be the best model for mineral development agreement is yet to be made. I also want us to talk about how the Government can direct the country’s obsession for mining in the right direction.”

After the remarks by the President, the Minister and the World Economic Forum, the Roundtable continued with a plenary session—“Responsible Mineral Development Initiative, results, and paths forward”—after which Mr.Wong presented the report from the Mining Session of the 2011 World Economic Forum annual meeting in Davos-Kloester, Switzerland, as well as the result of the last eight month’s work—the initial draft of the Model Mineral Development Agreement, presented also at the 2011 annual meeting in Davos. The participants to the roundtable, asked questions and provided their opinion regarding the topic under discussion. Moreover, break-out sessions entitled, “Integration of the mineral sector”, “Mineral sector’s contribution to a country’s economy, and how to distribute the benefits fairly”.