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Bureau of Mines / Minerals yearbook mineral industries of Asia and the Pacific 1992
Year 1992, Volume 3 (1992)

Wu, John C.
Mongolia,   pp. [260]-266 ff. PDF (2.0 MB)

Page 262

262  THE MINERAL INDUSTRY OF MONGOLIA—l992development of all minerals
except coal and construction materials. The Geological Research Department
controls most of the functions of the former State Geological Center (Geological
Survey of Mongolia). 
 The National Geoinformation Center of Mongolia, under MGMR's Geological
Survey of Mongolia, began building Mongolia's first modern data bank for
national mineral resources in July 1992 with a $206,000 grant from the United
Nations Department of Economic and 
~ Social Development. The project was to ~ provide the skills and equipment
for establishing a fully integrated and automated computer-based geodata
center, which is capable of providing adequate services to other government
agencies and all interested authorized users. By the end of the project,
a data base of a single 1 : 1 ,000,000 map sheet and four 1:500,000 map sheets
for the Orhon-Tuul area with high gold potential in north-central Mongolia
will be completed. The data bank will have remote sensing, topographic, geological,
geophysical, geochemical, hydrogeological, agricultural, and archaeological
information as well as information on mineral title, mineral deposit, mineral
occurrences, mine production, forestry, and environmental data. 
 MONMAP Engineering Services Co. Ltd. , formerly a part of the National Center
of Geological Information and Remote Sensing under MGMR's Geological Survey
of Mongolia, was partially privatized with 50 % equity owned by local investors
in December 1992. Scope of the company's services included mapping, remote
sensing, geophysical, geological, geochemical, and other geoscientific surveys.
It also provides geological information on mining districts, exploration
areas, and access routes as well as drilling services. 
 To attract foreign investors to participate in exploration and development
of Mongolian mineral resources, the Ministry of Geology and Mineral Resources
reportedly had completed drafting a new mining law in August with the World
Bank's assistance. In late 1992, the draft reportedly was 
being reviewed and revised by related Government agencies. The revised final
draft was expected to be adopted and passed by the Mongolia Great Hural by
the end of 1993. A new foreign investment law, which would allow 100% equity
ownership by foreign investor and lower income tax, also was expected to
be passed by the Mongolian Great Hural in 1993. 
 According to a local press report, the main obstacle to foreign investment
in Mongolia is its geographical location, small domestic market, poor infrastructure,
and political factor. Since the declaration of an open-door policy and implementation
of the 1990 foreign investment law 2 years ago, a total of 84 joint ventures
involving $22 million investment were established with 17 countries participating.
Of the total number of joint ventures, about 50 % were for food production,
27 % were for tourism, and 25 % were with partners from the former U.S.S.R.
 Since 1991, two U.S. companies had participated in the joint venture with
Mongolia for exploration of gold in north-central Mongolia and petroleum
resources in eastern Mongolia. The Metal Mining Agency of Japan also had
a joint-venture agreement with Mongolia 
~ to explore for lead-zinc-silver in northeast 
~ Mongolia. 
In 1992, a preliminary investigation 
~ for construction of the country's first 
~ hydroelectric powerplant at the River 
~ Egiin-Gol, about 60 km northwest of Erdenet, in Bulgan Aymag, was completed.
Topographic survey and other preliminary investigations for the proposed
$100 million powerplant were financed by the Asian Development Bank. Electrowatt
Co. Ltd. of Switzerland and MONMAP Engineering Services Co. Ltd. of Ulaanbaatar
reportedly were involved in the preliminary investigation. 
 Mongolia was the world's fourth largest fluorspar producer in 1992. Mongolia
remained an important producer of copper and molybdenum in the region. The
activity of the mining industry in 
1992 was severely affected by the shortage of electric power, fuels, and
supplies, such as diesel fuel for power generation, spare parts for mining
equipment, and tires for trucks. The shortage was caused mainly by a lack
of hard currency for trade and reduced financial aid from Russia. As a result,
the overall output of the mining industry dropped substantially in 1992.
 Mongolia's overall mineral production in 1992 was estimated to be about
15% lower than that of 1991. In 1992, production of copper concentrate at
the Erdenet Mine increased by 17 % , while production of molybdenum decreased
by 1 1 % . The output of coal, limestone, and other metallic and industrial
minerals was at a lower level than that of 1991. The decline in coal production
was due to a lack of spare parts and diesel oils for mining equipment and
truck. The sharp drop in production of cement and limestone was caused by
the curtailed construction industry caused by the withdrawal of most Russian
construction companies from Mongolia in 1992. The lower output of fluorspar
was owing to reduced exports to Russia. (See table 1.) 
 In 1992, Mongolia continued to conduct a significant portion of its merchandise
trade with the former U.S.S.R. and other Council for Mutual Economic Assistance
(CMEA) block countries. Under a protocol agreement on trade with Russia signed
in June 1992, Russia agreed to supply 800,000 tons of refined petroleum products
and granted Mongolia a credit of $38.7 million. According to a local press
report, Mongolia's merchandise exports rose to $368 million in 1992 from
$350 million in 1991, while Mongolia's imports also increased to $400 million
in 1992 from $357 million in 1991. 
 Exports of mineral commodities (mainly concentrates of copper, molybdenum,
and fluorspar) were estimated at more than $270 million, accounting for more
than 75 % of Mongolia's export earnings in 1992. According to the Ministry
of Trade and 

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