The Mongolian extractive sector, in its modern avatar, completed 95 years in 2017. Archaeological relics indicate that Mongolians practised mining 5000 years ago, but scientific mining began in 1922, with the post-People’s Revolution government deciding to commence coal extraction work at Nalaikh. The date of that decision is celebrated annually as “miners’ holiday”.
Throughout these 95 years, the mining sector has been a catalyst in Mongolia’s economic and political evolution, from socialist Mongolia supplying raw materials to the Soviet Union to a democratic Mongolia counted among the world’s most resource-rich countries. It is worth noting that during the days of socialism, many mines were put into operation, many deposits discovered, and many mining professionals prepared – all of which made the transition possible. Large deposits discovered during that period later attracted investment and were put into economic circulation, forming the foundation of our economic prosperity today.
The move to a market economy called for new policies and strategies, and the period spanning the last 27 years period has seen radically different rules of the game come into play. Along with domestic investors, Mongolia has opened its doors wide to mining companies and investors from all parts of the world and offered them exploration and extraction licences for any commodity of their choice. Many did rush in, exploring and developing deposits, and the Mongolian extractive sector now has everything from artisanal miners holding only a shovel, to world class national companies to an international collaborative venture like Oyu Tolgoi, holding the world’s third biggest copper-gold reserves, and working with state of the art technology.
National economic growth and expansion has throughout been dependent on the mining sector. When revenue from mining led to a 17% economic growth, many took to calling Mongolia a second Saudi Arabia. During the years of the mining boom, 85% of foreign investment was in mining, while 33% of the consolidated budget and 95% of export earnings came from this one single sector.
A feature of the history of Mongolian mining in the past 27 years has been its success in adopting modern technology and international standards of operation. Many challenges have had to be met, as the sector has gone through two mining super cycles as well as periods of stagnation. Booms make fortunes, while busts offer lessons. Political policy making and the legal system have sometimes failed to provide proper and adequate support to economic development, especially in the mining sector, but such and other internal and external obstacles have merely hindered but not halted its growth. The mining sector made the best of a favourable commodity market in 2017, and the good times are expected to continue in 2018.
On the 95th anniversary of a sector which is an integral part of Mongolian life, MMJ greets all who have worked hard to help reach the landmark, and thus contributed to the development of the geological and mining sector. We wish the extractive sector would find the right and best path to development and prosperity, and hope that the coming years will bring further progress and achieve sustainable national development. We also offer our warm gratitude to our readers, who choose The Mongolian Mining Journal to be their link to the sector. We have shared 10 years of the sector’s 95 and are happy to celebrate together, and to hope that we have many happy returns of the celebration.