Mineral Resources and Petroleum Authority of Mongolia CURRENT SITUATION OF ASM IN MONGOLIA 6th Annual CASM Conference November 11th, 2006, Antsirabe, Madagascar Chuluunbaatar Enkhzaya

Current Situation of ASM in Mongolia Mongolia at the Heart of Asia A Growing Mineral Sector MRPAM Artisanal and Small-Scale Mining Mongolian-Swiss Project “Sustainable Artisanal Mining”

MONGOLIA AT THE HEART OF ASIA

Mongolia Location Area 1 564 116 sq. km Population 2,6 Mio landlocked in NE Asia Area 1 564 116 sq. km Population 2,6 Mio Nationality, Language Mongolian Capital Ulaanbaatar Climate Continental, -/+ 30ºC Literacy rate 96% Economy Agriculture, Mining, Tourism, Service GDP per capita 650 USD (2005)

A GROWING MINERAL SECTOR

A Growing Mineral Sector % 2002 2003 2004 2005 Of GDP 10.1 12.7 17.3 18.0 Of GIP 47.3 49.6 64.7 65.5 OF EXP. 56.7 58.9 70.8 75.8 CVRD, BHP Billiton, Rio Tinto etc.

Production of Mining sector Mineral products (6000 deposits, 80 types of commodities) 2004 2005 2006* Copper in concentrate, th.tn 130,0 126,3 130 Molybden in concentrate, th.tn 1140,9 1153,0 1160,0 Cathode copper, tn 2376,0 2474,5 2500 Gold /chemical pure/, kg 18,6 21,9 23.0 Fluorspar concentrate, th.tn 104,8 93,7 95,0 Metallurgical fluorspar, th.tn 206,7 233,4 250,0 Coal, th.tn 6794,7 8255,8 8500,0 Zinc concentrate, th.tn NEW - 22,8 Iron, th.tn NEW 33,5 167,7

MINERAL RESOURCES AND PETROLEUM AUTHORITY OF MONGOLIA

Mineral Resources and Petroleum Authority of Mongolia (MRPAM) Implementing Agency of the Mongolian Government: policy in geology, mining, petroleum 5 Offices: Geological Survey Mining Office Cadastre Office Petroleum Exploration Office Petroleum Production Office 2005: SAMU (responsible for ASM) within Mining Office

ARTISANAL AND SMALL-SCALE MINING

ASM: Dissemination and Production Began in 1997, informal About 100 000 miners In 18 out of 21 Provinces 36.7 mio. USD = 15% of GMP: Gold (hard rock, placer) 1.7 tn 24.8 mio. USD Coal 521 th.tn 8.1 mio. USD Fluorspar 51 th.tn 3.4 mio USD Gemstone, fossilized wood, mica, sand, gravel and clay

ASM: Positive Impacts and Problems Creating Employment Increasing Income Supporting Local economy Problems Child Labor Health & Safety Environment Other Resource Users Criminality

ASM: A Comprehensive Strategy Comprehensive Strategy: in process, within the National Development Strategy Public Discussion and Hearing: National Forum on Mining, Regulation and Environment in May 2006 Vision: controlled utilization of common resources for sustainable development with a pro-poor economic growth

ASM: An Integrated Approach a formalised, profitable sub-sector of Mongolian economy, directly impacting the income situation of the population – especially rural population – contributing to local development and poverty reduction. Developing ASM into a new, small and medium sized mining sector – small and medium-sized enterprises - as one of realistic ways to diversify the rural economy Legal framework: law draft submitted to the Parliament Challenges and many open questions, e.g.: Engaging all stake holders, especially miners (networks) Commercialization for sustainable income (value-adding) Conflict with other resource users, good governance etc.

“SUSTAINABLE ARTISANAL MINING” PROJECT

Sustainable Artisanal Mining Project SDC - MRPAM Sustainable Artisanal Mining (SAM) since July 2005 Goal: Artisanal miners are recognized as responsible members of a key economic sub sector contributing to sustainable rural development of Mongolia

Objectives transparent and straight-forward policy and regulatory framework institutional structures and organizations at all levels profitable and responsible mining and extended business activities artisanal miners and other resource users: socio-ecologic management

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