S. Demberel : We cannot establish an authoritarian regime in the mining sector

We cannot have  a so-called state authoritarian regime because history has proven that such a regime is not efficient at all. Thus, the main principle is ÐÐÐ or forming a partnership of the State and private entities. The State, as an owner/controller makes a profit, but should not be a sole winner. We should practice the principles of “win- win“ or, that is to say, all parties should win.

Nearly five billion USD  will be invested for the infrastructure of projects  Cooperation of the State with the private sector is coming up to a new level.

The country is only beginning to provide a legal basis for PPP or Partnership of the State and private entities. Korean ÐÐÐ law, for example, is a whole volume with many pages. Mongolia does not need such a thick book or a whole packet of the laws. It should be enough that the main principles are stated in the concept and that laws are made for approval as the Government policy document. A legal basis should be provided for “case by case“ implementation. That is to say, a legal basis for enforcing PPP variations on certain projects.  There is no need for a proliferation of laws and regulations. Sometimes, things are regulated by a contract or an agreement. It should be sufficient if concepts in principle and other principles should be stated in the general law.  The rest can be regulated by an agreement or contract. In that case, making international sample contracts can be helpful. The samples should be explained clearly for which project and in which mining sector it is recommended.  
Mineral resources are huge in the country and this sector is going to boost the economy of Mongolia. In that case the partnership contract based operation will be essential.  It is possible that domestic companies benefit from mining projects as a contractor. Then, jobs will be created, etc.  All of that needs must be stated in the law in principle.

Have you seen the law about concession? What do you think about how well it is developed?

The concession law is a part of the law about a right to ownership that can be transferred from a subject called “the State“ to other subjects in regards to right of deposit exploitation, possession and disposal. So, concession can be understood as a transmission of development right; whereas, leasing is for transmission of operational rights.  “Development rights“ means investment in the deposit area where the initial owner remains the same. Actually our laws on this regard are poorly written.