-Parliament recently approved amendments to the Constitution. It enacted Article that stated, “Natural resource is the state and public property.” How will it affect the mining sector?

-I expect positive results from it. As previously stated in the Constitution, natural resources belonged to the state, and now it shall be the wealth of the public as well. I assume there is no negative consequence in it. The key changes in the Constitution have been made to stabilize the investment climate. I believe eliminating overlap of legislative and executive branches is relatively good for solid governance since foreign investors will come to a well­governed country. Thus, four members of the Cabinet are allowed to join the Parliament. It is hoped that those who are familiar with the sector will work in the government.

-Change in Minerals Royalty fee is currently in discussion. What is your view on it?

-Well, the case proves that the mining sector is not working properly. Companies pay a portion of their gains from using natural resources for Minerals fee. There is no need to address this issue of whether to pay a royalty or not. Mining companies agree to pay this fee. However, there is a disagreement over whether payments are high or low. Parliament should conclude and make the environment to pay royalty as soon as possible.

-According to the National Statistics Office, Mongolia’s GDP has increased by 6.3 percent in the third quarter. What do you think the main driver of it?

-In 2018, the GDP increase of Mongolia was 7.2 percent. But it decreased by 0.9 percentage point, to 6.3 percent in 2019. There are several factors that may have triggered it to decline. Firstly, export revenue has dropped, especially, prices of copper and coking coal have fallen due to the trade war. Secondly, FDI has declined respectively since the beginning of 2019. Finally, the inflation rate has reached 7.6 percent in the third quarter, but the Bank of Mongolia has set the target level at 8 percent. In other words, it shows the country’s lack of fulfillment on its inflation plan.

The legal significance of this week's decision by Mongolia's Administrative Court was not entirely clear on Wednesday, but the decision highlights the discontent that exists in Mongolia over the 2015 expansion agreement, which was struck by Rio chief executive Jean-Sebastien Jacques and former Mongolian Prime Minister Chimediin Saikhanbileg in a Dubai hotel.

That agreement, which kick-started an underground expansion that will cost more than $US6 billion ($8.8 billion), is now the prime source of tension between Rio and the Mongolian government, which is controlled by political opponents of Mr Saikhanbileg.

Mr Saikhanbileg was temporarily put in jail by political opponents in 2018 over allegations he misused his power in the striking of the 2015 Dubai agreement, with some opponents believing he acted unilaterally and without the appropriate level of respect for parliamentary process in the young democracy.

This week's court hearing appeared to hint at similar themes; reports suggest the court upheld claims by a non-government organisation that due process was not followed in the striking of the 2015 underground agreement.

''Rio Tinto strongly refutes any suggestion that the (expansion agreement) or any of the foundational (Oyu Tolgoi) agreements are illegal,'' said Rio in a statement.

Rio gets exposure to Oyu Tolgoi through its 50.79 per cent stake in Canada's Turquoise Hill Resources, and the Canadian company published an almost identical statement on Wednesday.

The court ruling just adds to the many aspects of sovereign risk that surround the project.

Canaccord analyst Dalton Baretto visited Mongolia in September and came away with increased concerns about the impact sovereign risk could have on lenders to the mine.

Rio and Turquoise Hill have started talks with lenders to cover billion dollar cost blow outs on the Oyu Tolgoi expansion, and Mr Baretto believes lenders are unlikely to be able to get the certainty they need before Mongolians vote at elections in the middle of 2020.

''We are very concerned that the debt component of the funding package
will not be in place in time to prevent a slowdown on construction. The lenders have indicated that one of their primary requirements is certainty around any changes to the 2009 and 2015 investment agreements, the negotiations of which could drag on for some time given a pending election,'' he said in a note published in September.

''Additional project financing will require the approval of the government of Mongolia, who could potentially use this as leverage to bolster their negotiating position.''

Rio is building a giant underground copper mine, known as Oyu Tolgoi, in the country. Yet the project has been beset by delays, legal probes, cost overruns and government pressure.

Rio said Tuesday that early reports suggest an administrative court has upheld claims by the Darkhan Mongol Nogoon Negdel non-governmental organization that Mongolia didn’t follow due process on the agreement that underpins its development of the asset.

The group, which promotes ecological balance and economic independence, had disputed the Dubai agreement signed in 2015, as well as the authority of Mongolian government officials involved in the negotiations.

It’s not yet clear what the implications will be. But with the court’s formal written ruling expected to be released in the coming weeks, it adds a fresh element of uncertainty to an already difficult project.

“The Dubai agreement is not annulled by the court decision. However, this decision raises questions about due authorization and capacity of those who signed the Dubai agreement,” said lawyer Solongoo Bayarsaikhan, a managing partner of Avinex Partners LLP in the capital, Ulaanbaatar, who is not involved in the case. “We need to see the actual court decision.”

Earlier this year, Rio warned that its flagship growth project could cost as much as $1.9 billion more than forecast and faces potential delays to full production of as long as two and a half years. The expansion of the mine has run into difficulties after potential stability risks were identified within the planned underground operation, and it could now cost as much as $7.2 billion.

The overruns will mean Mongolia must wait longer before profits start flowing from the mine to the government.

On top of the actual problems building the project, there have been numerous controversies in the country. A parliamentary working group recommended in April that Mongolia review the 2009 deal that launched construction and revoke a 2015 agreement allowing for an underground expansion to tap into most of its mineral wealth. The mine has also been at the center of tax disputes and a probe into allegations of corruption.

Rio said that it “strongly refutes” any suggestion that its agreement is illegal.

To contact the reporters on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net;Terrence Edwards in Ulaanbaatar at tedwards100@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel Hill, Dylan Griffiths

Located in the South Gobi Desert in Mongolia, immediately next to the Chinese border, Elixir’s Nomgon IX CBM PSC covers an area of around 30,000km2 (over 7 million acres). This is a region that is exceptional in its combination of massive potential gas resources, minimal competing land uses, and a location right in the heart of Asia. Elixir’s PSC is exceptionally well placed to supply China, being just 410 kilometres from China’s East-West Pipeline.

China is experiencing a rapid rise in gas demand driven by air quality concerns in its major cities and legislative changes resulting in a large scale switch from coal to gas, along with an increase in renewable energy. Yet China is unable to produce enough gas, forcing it to import to meet domestic demand. This shortfall is being met by pipeline imports from Central Asia and Myanmar, as well as more pricey LNG imports along the coast.

The PSC has a “giant prospective gas resource” with an unrisked best case recoverable prospective resource of 40.1 Tcf, and a risked best case resource of 7.6 Tcf.

The current drilling program will see Elixir drill two fully tested core-holes and it has the option for a third. (source: https://www.sharecafe.com.au)

In particular, some changes are proposed including improving legal environment for trade of food raw materials of plant origin as well as wholesale and retail sales and issuing low interest loans for term of more than five years for building storage for food and meat products.

The cabinet also made proposals to provide support in building storage with capacity of 500-1000 tons in rural areas and giving government support for establishing storage facilities and sales centers with nonstop operations financed by private-sector capital.

The average density of PM2.5 in Ulan Bator stayed at 90 micrograms per cubic meter of air in October, down 18.8 percent year on year, the agency said in a statement.

In addition, the average density of PM10 in the capital city dropped to around 90 micrograms per cubic meter of air last month, a year-on-year decrease of 7.4 percent, it said.

The reductions of air pollutants in Ulan Bator are largely due to a government ban on domestic use of raw coal which came into force on May 15, according to experts of the agency.

Since then, households in the city have been supplied with processed fuel instead of raw coal.

Air pollution has been one of the most pressing issues for many years in Ulan Bator, which is home to over half of Mongolia's population.

16.1st of the law on regulations to amend the Constitution of Mongolia reads, “The Speaker of Parliament shall personally carry and introduce the Constitutional amendment to the President within two working days since its approval.”

Accordingly, yesterday the Parliament Speaker G.Zandanshatar introduced the Constitutional amendment. The Speaker said, “I am presenting to You, Head of State of Mongolia, the Constitutional amendment adopted by the Parliament with 100 percent votes of 64 MPs who were present at the plenary meeting dated November 14.”

“28.5 percent of the Constitution or 36 provisions of 19 articles out of its 70 articles have been amended. Within the fundamental principles to ensure balance and control of governance, improve government stability and parliament’s responsibility and strengthen local autonomy, the changes corrected six out of seven amendments made to the Constitution in 2000 and reflected the principle that natural resources shall be under the power of the people and the most of the benefits shall be given to the people,” said the Speaker.

Following the introduction, Speaker G.Zandanshatar requested President Kh.Battulga to endorse the original copy of the amendment made to the Constitution of Mongolia.

The Sustainable Artisanal Mining project is one of the many coherent agricultural, food security, primary education-vocational training, and governance improvement projects that the Government of Switzerland is implementing in Mongolia through the Swiss Agency for Development and Cooperation (SDC). It has been carried out from 2005 to 2019 in four phases, laying the foundation for organizing artisanal and small-scale miners into cooperatives and providing them with guaranteed jobs.

Compared to 2013, the number of artisanal and small-scale miners has doubled this year with around 10,000 miners working in 1181 cooperatives. The average annual income of those miners also grew by 55 percent in 2015 and by 16 percent in 2016, resulting in a drastic decrease in the number of accidents caused by illegal mining. In addition, numerous positive changes have been made. For instance, miners with their own funds rehabilitated a total of 526 ha of land, a 20 fold increase compared to 2013, and mercury free ore concentration technology was introduced in Gobi-Altai, Bayankhongor, Selenge, Tuv, Umnugobi, and other aimags.

“Artisanal and small-scale mining concerns not only the Ministry of Mining and Heavy Industry, but many social sectors. Thus, every sector has to develop further the good practices introduced into the field. Thanks to the project, mercury-free gold processing technology was introduced, artisanal and small-scale miners were organized into cooperatives, and small-scale rehabilitation has become possible. It also appears that the miners’ competitiveness is increasing as they started investing in other areas while making contributions to the local development and economy,” said project coordinator N.Erdenesaikhan.

Governor of Bayankhongor aimag G.Bayanjargal stressed the necessity of paying considerable attention to developing artisanal mining properly and that land issues should come first of all.

Head of the Shijir cooperative of Selenge aimag D.Tuya said, “Our cooperative has 15 members. Our transition to a cooperative with the purpose of ensuring occupational safety and improving our livelihoods is giving its benefits. In 2014, we conducted both technical and biological rehabilitation in one ha of land. Besides artisanal mining, we are running Euro fencing production business, diversifying our income source.”

"A 20-member delegation of Mongolia attended the United Nations' International Conference on Population and Development in the Kenyan capital Nairobi last week. One of the representatives has tested positive for cholera," the ministry said in a warning statement, urging citizens not to go to cholera-affected countries.

The person infected with cholera is admitted in a hospital in Kenya, said the ministry.

Cholera is an infectious disease that causes severe diarrhea, which can lead to dehydration and even death if untreated, according to the World Health Organization.

It takes between 12 hours and 5 days for both children and adults to show symptoms after consuming contaminated food or water.