July 2013
The Mongolian presidential elections have just wrapped up. Who is the newly re-elected Ts. Elbegdorj? First, he will steadily work in the following 3 areas.
1. He will adhere to the policy of attracting more foreign investment. To accomplish this, he will seek to partner with reputable, large investors in the mining sector. He will definitely change the current situation of the Tavan Tolgoi deposit where small companies have made one year short-term mining contracts to ensure that they maintain operation. But it is likely that he won’t hide his view that it is more profitable for Mongolia to make a long-term management contract with American company Peabody Energy. It is clear that the president will be proactive in coming to an agreement with Rio Tinto about the Oyu Tolgoi deposit until they make a confidential contract. Given that he has been elected to a second term, and with the Democratic Party firmly holding many seats in Parliament, with the support of Ulaanbaatar city officials, and, even more importantly, with a fair amount of time before the next election, he can work boldly and with determination to make historic decisions in the mining sector. He wishes to make decisions so that he will be remembered as a modern day Chinggis Khan in this most interesting time in Mongolian history.
2. He will tighten government oversight in the mining industry. Namely, it is clear that geological prospecting will be limited. Ts. Elbegdorj will strive to increase government oversight in mining, while decreasing its direct involvement. He explained this position very clearly in 2010 after he presented the bill of temporarily withholding prospecting licenses and Parliament passed it. This temporary law that he presented has been extended enough times that it could end up being implemented long-term. Four months have passed since he gave orders to the ministry of the sector to develop a government policy document regarding the mining sector. Now, it is clear that Ts. Elbegdorj will hasten to get this policy document approved by Parliament. After attaining this document he will continue the discussion on the new bill for the Mineral Law. Ts .Elbegdorj is preparing to bring legal reform of the mining sector. It seems the new bill could be passed this year. It is clear that the government will follow under his instructions. It is obvious that the President of Mongolia will adhere to the policy to give importance to working with reputable and large partners on the same level and with the same rights, but to push middle and small companies away from the mining industry.
3. He will faithfully support national companies. Ts. Elbegdorj’s democratic worldview sets him apart from his opponents. He respects privately owned property. Namely, he respects the interests of big national companies. Therefore, he will harshly criticize the government for being involved in business operations and owning shares in the business of mining infrastructure. There is the possibility that this criticism will lead to disagreements with government ministers. Ts. Elbegdorj leads N. Altanhuyag’s cabinet from behind the curtain and it is almost clear that, on behalf of the hesitant Prime Minister, the President will push the government ministers. He repeated many times during his campaign the importance of government stability. How can the voters forget when he proudly proclaimed, “While I was in office, the government worked steadily…”
Newly re-elected President Ts. Elbegdorj is very determined to reform all the relations in the Mongolian mining sector. In order to accomplish this, he will support these 3 policies, and it is clear that he will favor mutually profitable business of responsible mining over nationalism in mining.
One important thing to keep in mind is that while the new President was elected, he won by only 100,000 votes, which is a very small difference. This number reminds us that nationalism in mining is still strongly present in Mongolia.