Foreign trade balance deficits USD 213 million www.zgm.mn

The Bank of Mongolia (BoM) announced its foreign trade review for the first four months of this year. Trade balance deficits USD 213 million, plummeting by USD 959 million from a year ago. The amount of commodity turnover volume decreased by 31 percent or USD 1.3 million to USD 2.9 million compared to the same period of the previous year. In particular, export dwindled by 45 percent to USD 1.37 million and imports deteriorated by 10 percent to USD 1.5 million.In the first four months of 2020, the balance of currency paid trade fell by USD 918 million from the previous year, resulting in a deficit of USD 117 million. In terms of trade with neighboring countries, 58 percent or USD 1.7 million of the total trade turnover was with China and 17 percent or USD 494 million was with Russia. Trade with Russia decreased by 3 percent year over year, and trade with China downturned by 38 percent. Additionally, export contraction in 45 percent was mainly triggered by a slump in mining products export. In other words, a decline in exports of mining products led to a 40 percent reduction in total exports. The rate of mining raw materials in total exports increased by 2 percentage points from the same period of the previous year, while the share of livestock exports slum ped by 2.4 percentage points.

MNT213 billion spent on health sector www.montsame.mn

Ulaanbaatar/MONTSAME/. At today's extended meeting of the State Emergency Commission, Minister of Finance Ch. Khurelbaatar reported on the economic measures being taken by the Government during the COVID-19 pandemic.

UB to use facial recognition to fight crime www.news.mn

By 2022, surveillance cameras detecting faces will be installed across 80 percent of the Mongolian capital. Under the ‘Safe City’ programme, which is being implemented by the Ulaanbaatar City Administration, facial recognition devices will prevent crimes. The programme will be implemented in three steps. As a first step, 2000 cameras will be installed in UB this year; 600 of them at road intersections and the remaining in public spaces.

Mongolia and Taiwan: a growing trade relationship www.news.mn

Despite the distance and limited trade figures between the two countries, Mongolia is a crucial partner for Taiwan due to its abundant metal resources; however, for a country that once built the largest empire in Eurasia, it remains remarkably mysterious to many Taiwanese.

The way we shop has fundamentally changed. That's good news for Alibaba www.cnn.com

Rising US-China tensions halt copper price rally www.mining.com

Industrial metals fell back on Friday as warnings about rising tensions between the world’s two largest economies overshadowed a massive economic stimulus announced by Beijing, the world’s top commodities consumer.

Gold price up as pressure builds on US-China relations www.mining.com

Gold rebounded on Friday as ongoing concerns about the economic fallout of the covid-19 pandemic were compounded by fears of rising political tensions between China and the US.

13 parties, 4 coalitions and 137 independent candidates file to run for elections www.montsame.mn

Ulaanbaatar/MONTSAME/. The General Election Commission (GEC) announced that it has completed receiving documents of candidates nominated by the political parties or coalitions as well as independent candidates, who are registered to participate in the 2020 election to the State Great Khural.

Mongolia’s GDP slumps by 6.1 percent in Q1 www.zgm.mn

Mongolia’s gross domestic product dropped by 6.1 percent in the first quarter compared to the same period last year, the National Statistics Office (NSO) reported on Wednesday. According to the NSO, the economy amounted to MNT 7.2 trillion in the first three months of this year.

Exploration and mining license application process: the example of the State of Victoria in Australia www.news.mn

In most countries, extractive companies are required to apply for and hold an exploration or mining license prior to carrying out any exploration activities on land. Mongolia utilizes a licensing regime, which means that “all rights and obligations are the same for any license holder, regardless of the resource mined, the entity type, or the origin of the investment”[1]. In reality, Mongolia accepts two types of exceptions, the type of resource (petroleum, radioactive materials and construction materials) and the size of an operation (i.e. small-scale mining in an effort to formalize artisanal mining in 24 provinces). Given the importance of extractive industries in the country’s economy, Mongolia has been making continuing efforts to improve its legal environment according to global standards and best practices. The parliament amended certain articles of the Minerals Law of 2006 (Minerals Law) in October 2017 to modify the license attribution procedures. Transparency International Mongolia states in their Mineral Licensing Corruption Risk Assessment that, “some of the requirements are formalized and are appropriately and sensibly applied to most license-holders, but most are applied incoherently, particularly at the provincial level. Most of the executed contracts and permits are not publicly accessible.”[2] License attribution procedures and beneficial ownership are not always transparent, leading to bribery, conflict of interest, corruption, resource mismanagement and loss of livelihood for indigenous populations. Women, marginalized groups and local populations are too often underrepresented in the decision process, despite community consultation and approval being a right protected under international law and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

The Australian Victoria State Government Agency published complete guidelines to help licensees and license candidates through their application, which prove to be a wonderful source of information for civilians as well.[3] Their example can benefit Mongolia’s policy to improve the accountability and the transparency of license attribution and approval processes, where corruption starts.

The Australian government allows applications for four types of license, exploration, retention, mining and prospecting[4], whereas Mongolia only differentiates exploring and mining licenses. An exploration license allows its holder exclusive rights to explore for specific minerals. However, companies are prohibited to use equipment (other than non-mechanical hand tools) or explosives to excavate on the land, and to remove or damage trees and shrubs. Optional, a retention license can be granted for ten years between the exploration and mining stages, when a mineral resource has been identified but more time is necessary to conduct further evaluation work, planning, or establish the economic or technical viability of mining the land. A mining license enables the holder to work the ground, excavate and extract minerals. Prospecting licenses allow prospectors and small-scale miners to explore or mine in an area less than 5 hectares. In Australia, the process to apply for an exploration license starts with an application form that includes the company details, expertise and experience in mining, the project details, the funding, etc. If there is no competition, the applicant obtains the highest ranking. Otherwise, the agency will analyze each applicant’s merit and ability to meet certain requirements to determine the highest ranking. After this phase, the applicant who obtained the position must advertise their application to notify the public of their intentions to provide the opportunity for objections. It shows from the government an imperative for prospectors to be transparent and engage communities even before their application is accepted or denied. During that phase, the Ministry assess that the application meets the criteria of having an appropriate program of work, being

able to finance the proposed work and rehabilitation, and being a fit and proper person to hold a license[1].

As for Mongolia, according to the Extractive Industries Transparency Initiative (EITI), “mining licenses are awarded on a ‘first come first served’ basis.”[2] Granting a license through application represents a corruption risk as it is the initial stage. The interests of companies to obtain exploration license is high because it provides the right to apply for the mining license on a priority basis. However, information about eligibility of the applicant and to which extent they meet the requirements is not transparent nor available to other parties, such as local authorities who are required to approve of the application (such as the governors of the Aimag and the Soum).

The Fit and Proper Person Policy[3]

The “Fit and Proper Person” concept is integrated in numerous international and national legislation. This policy sets out the moral and conduct standards that will be considered by the Minister for Resources (or Ministerial delegate) in assessing a license applicant’s status as a ‘fit and proper person’, under the Mineral Resources (Sustainable Development) Act 1990 (MRSDA) in the Victorian State. This assessment is required in order to be granted a license of any type (exploration, retention, mining or prospecting license). If an applicant or license holder fails to meet these requirements, the license must not be attributed or must be cancelled. “The MRSDA establishes a legal framework to eliminate or minimize risks posed to the environment, to members of the public or to land, property or infrastructure.”[4]

Different factors are considered to assess the trustworthiness of an applicant’s status as a fit and proper person, such as their professional experience, professional ethics and behavior, respect of legal framework, norms and regulations, etc. “Assessing a person’s status as a fit and proper person involves considering their overall suitability to carry out a proposed activity and takes meaning from its context. This typically includes considering a range of relevant factors, such as the activities in which the person will be engaged, the nature of the activities and how the activities are regulated. A range of other factors is often taken into consideration to assess a person’s overall status as a fit and proper person to undertake an activity, including the seriousness of previous unacceptable behaviors (including resultant harms and penalties), singular or repetitive patterns of unacceptable behaviors, reformed behaviors, mitigating circumstances and time elapsed.”[5] The implementation and the respect of these high standards aim at ensuring that “only those persons with the appropriate expertise, professional integrity and high standards of personal behavior are authorized to undertake certain types of activities, in the public interest.” As such, it is not a fixed, one-time-only evaluation. License holders may need to submit updated information to inform the assessment of their continuing status as a fit and proper person.

Accountability and transparency of the mining sector would greatly benefit from a stricter policy regarding applicants’ backgrounds and their expertise to undertake projects that are potentially harmful for the environment, people livelihood and fundamental human rights. The Victorian Government’s Fit and Proper Person policy provides a good example of how countries can implement and apply higher standards to combat corruption from the early stages off a mining project.