“No exploration licence without prior local approval” 

S. Purevsuren, a journalist with The Dundgoviin Amidral, talks to O. Bat-Erdene, Governor of Dundgovi aimag, on the current mining situation there, and how mining is benefiting the local community.

Could you give us some current data on mining in Dundgovi aimag? 
When the year began, there were altogether 213 licences registered, covering 783,000 hectares or 10.5 percent of the total territory of the aimag. Of these, 98 were for extraction, spread over 13 soums, and 115 for exploration, spread over 15 soums.  

Of the 98 extraction licences, 30 are for fluorspar, 24 for coal in 7 deposits, 17 for gypsum in 3 deposits, 5 for construction materials, 7 for iron-zinc, 5 for gold, 2 for limestone and one each for nonferrous metal, graphite, lithium, and perlite. These are held by 74 entities, 40 of them domestically owned, 17 foreign and Mongolian joint ventures, and another 17 fully foreign invested. 

Of the 92 companies that hold the 115 exploration licences, 72 are Mongolian, 8 foreign and Mongolian joint ventures, and 12 fully foreign invested. 
In 2017, 40 extracting companies paid MNT1.4 billion as royalty, MNT130 million as land fee, and MNT22.8 million for water usage, besides paying MNT1.8 billion into the state budget. 

The main mining products are coal, fluorspar and limestone. Compared to 2017, last year’s limestone production was 32 percent less by volume and 3.4 percent less in monetary value; 2% less coal was mined, but it brought in 12.5 percent more in revenue; similarly, fluorspar output was 15.5 percent less by volume, but revenue from that was 28.8. percent more. 

Most of the mining companies in the aimag work for fluorspar. How do you regulate their work and also that of buyer companies? 
At present, companies run micro-mine operations in Bayanjargalan, Luus, Gurvansaikhan and Khuld soums. Their activities are regulated under the Regulation on Conducting Mining Operation through Micro-Mines which was approved by the Government of Mongolia’s Resolution #151 in 2017. Some areas not covered by this regulation, as also issues of buying minerals raised by the micro-miners are regulated by guidelines approved by the soum parliament in 2013.  

Do these micro-mines have a positive impact on the development of the soum and the life of citizens? What form do these benefits take? 
A total of 489 persons who work for the 56 micro-mining cooperatives have been provided with health and social insurance. They also pay taxes on their income. Last year, micro-miners in Khuld soum extracted 9,400 tonnes of fluorspar and the cooperatives paid MNT51.8 million in taxes, while the buyer companies paid MNT61.6 million in taxes, fees and donations. Our conclusion is that the work output of one micro-miner benefits 2-3 persons. That is the positive impact in your question. 
    
What measures have you taken to reduce negative impacts on the environment and to ensure reclamation? What results have you had?  
As per the agreements signed between micro-mine cooperatives and soum governors, the Department of the Environment and Tourism and specialized inspectors review every Environmental Management Plan. After these are approved, working practices in these mines are carefully monitored. In Khuld soum, the fluorspar is mined from deep down and technical reclamation is carried out without delay. Last year, a 10-hectare area in Bayanjargalan soum was reclaimed by the two cooperatives who had worked there and returned to the soum. There is a rule to put the deposit money of the micro-mine cooperatives into their common fund. Companies that buy fluorspar give MNT2000 per tonne into the fund for environment protection and reclamation of the soum. The amount thus collected is spent on reclamation when the time comes for it. Much damage used to be done by the way the minerals were transported, but in 2017 the parliament of the aimag marked a fixed route for mineral transportation and this has been effective in containing the damage. 

How have you reacted to the recent developments around the Salkhit silver deposit? What relations did the mine have with the local community earlier? Do you see wider involvement of the local community in the operation of the mine now that it is under state ownership?  

On December 27, 2018, the Mineral Resources and Petroleum Authority revoked two licences held by JPF LLC over the deposit. Following this, the soum Governor ordered its assets to be recorded and the whole place sealed off. The border army is responsible for its security now, but the aimag has to pay for this.  This unforeseen expenditure over a long period is a burden for the aimag, which has run up debts of MNT45 million to several companies and individuals.  

As for your second question, JPF worked here between 2014 and 2017 and in that time paid MNT8.2 billion in taxes and fees to the state budget. In 2015, a discrepancy of MNT930 million was revealed which the company paid up. In 2017, a total of MNT1.8 billion was paid by the 40 mining companies operating in the aimag and of this, MNT1.3 billion came from JPF alone. There is a proposal to give the ownership of a part of the deposit to the local community, and we are pressing for this. No decision has been taken yet but if we do get to own part of the deposit, it will bring positive changes in the local economy. 

It is quite possible that Gurvansaikhan, which holds licences for the Khairkhan uranium deposit in your aimag, will start to operate there. Citizens are clearly worried over this, but what position do the soum authorities have on the issue?
Uranium is a raw material of strategic importance. Our country has a policy on atomic energy and there are also regulations in place, and we are sure citizens’ concerns would be considered at every stage. The Government of Mongolia owns 34% of Gurvansaikhan, while Uranium Industry LLC of the Czech Republic owns the rest. The deposit has proven uranium reserves of 8,400 tonnes. Our citizens have addressed their concerns to the President and the Government, and we hope nothing will be done that could damage the environment or people’s health. 

What steps do you want the Government to take so that mining gives more benefit to the local community?
Several steps have recently been taken by the Government to support citizens. All activities by licence holders must be regulated well. A tender for an exploration licence cannot be floated without prior approval from the local community. Arrangements should be made to ensure that minerals are transported only along paved roads built according to certain standards. The companies engaged in mining should be conscious of their social responsibility and operate in eco-friendly ways to benefit the local people, never forgetting that they mine minerals which are the state’s and thus public property.