Mongolia to double land open for exploration -mining minister

Entree Resources

06/03/2017 21:49

By Susan Taylor 
    TORONTO, March 6 (Reuters) - Mineral-rich Mongolia plans to 
double the amount of land available for exploration in an effort 
to tap into the mining industry's appetite for new resources and 
help shore up its finances following an IMF-led bailout. 
    Mongolia will increase the land to 20.9 percent of the 
country from 9.6 percent currently, and could announce the 
change later this month, the minister of mining and heavy 
industry, Dashdorj Tsedev, said in an interview on Monday. 
    Miners say Mongolia ranks as one of the best prospects in 
the world for new copper reserves, as the best quality ore 
bodies in many other parts of the world have been depleted and 
electric vehicles raise the possibility of a surge in demand. 
    The expansion reflects improved geological surveys, and the 
land open for exploration could increase as further improvements 
are made, the minister said at the Prospectors and Developers 
Association of Canada conference in Toronto. 
    "A big amount of land will be up for exploration and 
license," said Tsedev, speaking through a translator, adding 
that ecologically sensitive areas are excluded. 
    The land-locked country is home to Rio Tinto's  RIO.L  
massive Oyu Tolgoi copper-gold mine. Rio decided in June to go 
ahead with a $5.3 billion expansion, which will take five to 
seven years.  urn:newsml:reuters.com:*:nL8N1DR0MH 
    The mine will eventually be responsible for around 30 
percent of the economy, Rio said, but direct benefits 
for Mongolia will be delayed. According to a 2009 agreement, 
investors must recoup their original investment costs 
before Mongolia can collect dividends for its 34 percent 
shareholding in the mine. 
    Mongolia's economy grew at a double-digit annual rate over 
2011-2013 as foreign investors rushed in to take advantage of 
its vast untapped mineral deposits, but it has been hit hard by 
an economic crisis since 2016 due to government overspending and 
declining revenues from commodity exports.  L4N1G402L  
    Slowing demand for coal and copper, Mongolia's chief 
exports, and a plunge in foreign investment have left the 
world's most sparsely populated sovereign country with soaring 
debts and a rapidly declining currency, forcing government to 
hike interest rates and slash spending.  L3N1BK3EL  
 
 (Additional reporting by Barbara Lewis in London; Editing by 
Leslie Adler) 
 ((susan.taylor1@thomsonreuters.com; +1 416 941 8083; Reuters 
Messaging: susan.taylor1.thomsonreuters.com@reuters.net)) 
 
Keywords: MINING PDAC/MONGOLIA