Mongolian Mining Investment Environment Analysis


Mongolia was originally called Outer Mongolia or Khalkha Mongolia. With a territory of 1,566,500 km2, it is a landlocked country in central Asia and is located in the Mongolian plateau. North and Russia are neighbors, and the east, south and west sides have a 4,670-kilometer boundary line with China. The western, northern and central regions are mostly mountainous, with hills and plains in the east and Gobi deserts in the south. There are more than 3,000 large and small lakes in the territory, with a total area of ​​more than 15,000 square kilometers. The main rivers are the Seji River and its tributary Orkhon River. It is a typical continental climate. The lowest temperature in winter is -40 ° C, and the highest temperature in summer is 35 ° C. The average temperature is -2.9 °C.

The population is 2562800 (end of 2005) and the average population density is 1.5 people/km2. It is dominated by the Khalkha Mongolian people, accounting for about 80% of the national population. In addition, there are 15 ethnic minorities such as Kazakh, Dulbert, Bayat and Buryatia. The language is mainly Khalkha Mongolian, Lamaism is the state religion, and most of the residents believe in Lamaism, according to the "State and Temple Relations Act." There are also some residents who believe in Aboriginal Yellow and Islam.

The capital is located in Ulan Bator and has 21 provinces across the country. Currency name: Tugrik (TUGRUG), exchange rate: 10000 Tugrik = 59.61 yuan (June 2008).

1.1 Political economy

The Mongolian National Hural is the highest authority of the country. It has legislative power and a one-chamber system. It consists of 76 members and each term is four years. In March 1990, the Eighth Meeting of the Eleventh Large People’s Hural made a decision to establish a presidency. The President is the highest leader of the country and forms the core of the leadership of the new national system with the three points of the big Hural and the small Hural (the permanent organization of the Great Hural). The chairman of the ruling party serves as the prime minister. The constitutional amendment was passed on December 24, 1999.

National institutions are composed of the president, the judiciary, and the government. The government is the highest national executive body, and the party with the most seats after the election has formed a cabinet and is responsible to Da Hural. The government includes the Prime Minister, the Cabinet Secretary and the Minister.

Mongolia implements capitalist democracy. Has long been a planned economy. In 1991, it began to transition to a market economy and implemented the privatization of state-owned assets. In July 1997, the government adopted the “Provisional Privatization of State-Owned Assets from 1997 to 2000” with the goal of making the private sector of the economy dominant in the national economy.

In recent years, the political situation in Mongolia has been generally stable, and the economy has maintained a good momentum of growth. The economic growth in 2004, 2005 and 2006 were 10.6%, 6.2% and 8.6% respectively. Active foreign exchanges and pursue a "multi-point" foreign policy. In May 2005, the presidential election was held nationwide. Nahbaar, who was nominated by the Mongolian People’s Revolutionary Party, was elected president and was sworn in on June 24 of the same year.

The Mongolian economy is dominated by animal husbandry and mining. The livestock industry is the traditional economic sector and the foundation of the national economy. The industry is dominated by the light industry, food, mining and fuel power industries. The main export products are copper, molybdenum ore, wool, cashmere, hides, carpets and other livestock products; imports mainly machinery and equipment, fuel and other daily necessities.

1.2 Infrastructure

In order to develop the economy, the Mongolian government has formulated and approved economic development policies such as the “Millennium Road” project and the “Building a Unified Network for Power” and accelerated the construction of infrastructure and roads connected to domestic and foreign markets.

The existing roads in Mongolia are about 11,000 Km. Among them, hard roads only account for 11.9%, gravel roads account for 12.5%, and natural roads account for 75.6%. For a long time, the serious lag of road traffic development has become the biggest obstacle to Mongolia's revitalization of the economy. To this end, the Mongolian Parliament passed the “Millennium Road” project. The north-south, east-west road network connected with China and Russia, will become the railway trunk line connecting the Eurasian continent and then a main highway, the main road network connecting Mongolia with its neighbors and the new passage to the sea, The trunk line passes through the five major economic planning areas of Mongolia. Er Dunte amount of copper, Baga Nur coal mine, Bao ondor mining, oil field Tamu Cige Prague, Maer Dai uranium and other industrial areas are located in the vicinity of the "Millennium road" transport network. "Millennium Road" through the area is rich in rare metals, gold, tin, zinc, lignite and building materials and other resources. In the three years since the implementation of the “Millennium Road” project in Mongolia, in addition to the total length of the road that has been started and completed, the road design is about 1000Km.

Through the implementation of the unified power system program, in the past three years, about 2000Km high-voltage power lines have been set up, and 36 counties and settlements have been connected with reliable power sources. On this basis, seven counties have been added in 2004. Within the scope of the "Lighting" project, during the period 2000-2004, 30,000 households will be provided with renewable power resources, and the project will continue.

In addition, 2000Km long cables were laid for dozens of provinces, 28 counties and residential areas. Many provinces have established digital communication network systems. In 2003, all provinces implemented mobile communication and connected with international networks. According to statistics, there were about 40,000 mobile phone users in 1999, and it has increased to more than 260,000 in 2003.

2. Geology and mineral resources

Mongolia is rich in underground resources. More than 80 kinds of minerals such as coal, copper, tungsten, fluorite , gold, silver , molybdenum, aluminum , tin, iron, lead , zinc, uranium, manganese , phosphorus , salt and petroleum have been discovered, among which coal reserves About 500 to 152 billion tons. In addition, fluorite reserves are about 30 million tons, iron 2 billion tons, phosphorus 5.7 billion tons, copper 240 million tons, molybdenum 240,000 tons, zinc 60,000 tons, gold 3,000 tons, silver 7,000 tons, and oil 1.5 billion barrels. The Erdente copper-molybdenum mine has been listed among the world's top ten copper-molybdenum mines, ranking first among similar companies in Asia.

2.1 Geological overview

The geological structure of Mongolia is complex. The southern Mongolian fold system, the South Gobi fold system, and the Inner Mongolia fold system are roughly curved in the east-west direction and slightly southward, crossing the whole of Mongolia, with the deep faults of Tulgen and Daboge in the north. The northern Montgomery block is bounded by the entire fold system built on the broken Precambrian and Caledonian basements. The trough deposits began in the Silurian, and the most developed period was the Middle Devonian, ending in At the end of the Paleozoic. Due to the different degree of rupture of different locations in each trough, the sedimentary construction and activity are different, forming a number of roughly parallel tectonic-construction zones.

The sedimentary deposits of the southern Mongolian fold system are mainly the Silurian Early Carboniferous, which is dominated by submarine erupting volcanic rocks, accompanied by siliceous-carbonate and siliceous formations, which can be divided into two regions: the main deposit in the northern belt is The Silurian and Devonian systems; the southern belt is called the Gobi-Xing'an belt, and the main sediments are the Devonian and Lower Carboniferous. The main fold movement occurred in the Early-Middle Carboniferous. The Permian has continental volcanic rocks and monastic construction. The intrusive rocks are the Hualixi ultrabasic rocks and granites .

The base of the South Gobi fold is the Late Proterozoic and Ordovician carbonate-continental deposits. The sedimentation of the trough began in the Silurian, mainly in the Devonian, with large variations in the facies in the longitudinal and lateral directions, including marine, terrestrial, and marine-land mixed phases. The main folds occur in the Early-Middle Carboniferous. The Middle Carboniferous-Permian developed a series of regenerative depressions, depositing marine, coastal, terrestrial clastic and volcanic rocks, as well as flysch and rubble-like structures. The Hualixi intrusive rock is mainly granite.

The Inner Mongolia fold system is located on the southern margin of the Mongolian People's Republic. It can be divided into two zones: the Daranour belt in the north, which is mainly composed of Carboniferous and Permian carbonate-Land source rocks. The southern part is the Solangkel belt, which is mainly composed of basic and neutral volcanic rocks and siliceous deposits, and is produced by a large number of ultrabasic rock intrusions.

The Beimeng fold system is located in the northern part of Mongolia. The trough began to form in the Late Liffei period, consisting of differently constructed Late Lifei-Early Cambrian sediments and ancient intermediate blocks. The trench deposition consists of three different types. The first is represented by the lake zone, which is mainly composed of marine basic, neutral volcanic lava and clastic rocks, and the other is represented by the Idele belt, which is mainly medium-acid volcanic rock.

The third type is the most widely distributed, represented by the Binsu Cooper area, consisting of volcanic-clastic rocks, carbonate rocks and phosphorus-bearing construction. The main fold occurred in the Middle Cambrian, called the Early Caledonian movement. The Silurian and Devonian sediments were only found in the western part of the millet. The Permian-Early Mesozoic volcanic rocks are distributed in the eastern part of the fold system. There are Jinning period ultrabasic rocks and granites in the folds; Caledonian ultrabasic rocks, intermediate-basic intrusive rocks and granites; Hualixi period alkaline rocks and granites; Indosinian-Yanshanian granites.

The Mongolia-outer Baikalgari-Walilixi fold system extends from the Hangai Plateau to the Kent Mountain and then extends northeast to the Soviet Union outside Baikal. The oldest green schist system is exposed, sometimes with marbled limestone and quartzite , which belonged to the former Wende period. The Caledonian tectonic layers include the Late Proterozoic - Lower Cambrian, Middle Cambrian - Lower Ordovician. The Wende system—the lower part of the Lower Cambrian is a volcanic-sedimentary rock, and the upper part is a sedimentary rock. It is mainly composed of sandstone , siltstone, andesite , basalt , limestone, and is sandwiched between phyllite and limestone, with a thickness of 5000-6000 m. The Middle Cambrian-Lower Ordovician is mainly fine conglomerate with thick red sediments in the upper part, local neutral and basic lava and carbonate deposits, and continuous deposition with the underlying strata. After the Middle Ordovician, the trough was closed. In the Hualixi period, the area formed a reclaimed geosyncline on the Caledonian basement, accumulating the Devonian, Carboniferous siliceous-land source rocks, and partially volcanic rocks. The orogenic movement occurred in the Late Paleozoic. On the Caledonian and Hualixi tectonic layers, the Mesozoic continuation of terrestrial volcanic rocks and monastic construction. The main intrusive rocks are the Jinningian (Baikalian) ultrabasic rocks and granites, the Hualixi plagiogranite, diorite , granite and the Indosinian-Yanshanyan granitic intrusion.

The Caledonian fold system in Central Mongolia is located south of the Mongolia-Belgale fold system and extends eastward to the territory of Inner Mongolia, which is equivalent to the Erguna fold belt. The main strata of the folds are the Late Proterozoic, Late Proterozoic - Lower Cambrian, Devonian, Carboniferous, Middle Carboniferous - Lower Permian, Permian and Jurassic. The main fold occurred during the early Caledonian movement, forming a huge unconformity contact at the bottom of the Lower Paleozoic. Most of the Upper Paleozoic are continental volcanic rocks and monastic facies deposits, some of which are marine and coastal facies deposits. It is superimposed with Mesozoic continental clastic rocks, coal-bearing rock series and volcanic rock series, with marine Jurassic strata only in the northeast corner. The intrusive rocks include the Baikal ultrabasic rocks and granites, the Indosinian alkaline rocks and granites.

2.2 Status of mineral resources

Mongolia is a resource-rich country. Has been proven copper, iron, coal, manganese, chromium, tungsten, molybdenum, aluminum, lead, zinc, mercury, bismuth, tin, gold sand, rock gold, phosphate, fluorite, asbestos, graphite, 80 kinds of mineral mica, quartz, emerald, amethyst, turquoise, petroleum, oil shale ore and the like, comprising multiple origin 6000, approximately 500 million tons reserves. Among them, the proven reserves of copper, phosphorus, fluorite, coal and gypsum are among the highest in the world, and their development potential is huge. At present, about 500 deposits with more than ten minerals have been evaluated, about 150 deposits are being mined, and most of them have yet to be developed. Therefore, the successive governments of Mongolia have developed mineral resources as a driving force for their national economic development. One of the important policies, and focuses on organizational management, policy and regulatory support. The reserves and distribution of its main mineral resources are as follows:

Iron: Mongolia's iron ore reserves are 2 billion tons. Mongolia's iron ore resources can be divided into three major metallogenic areas and five major metallogenic belts, of which iron mineralization in the northern block of the eastern Mongolia is the most important. There are three large iron deposits, all located in the Bayanhongge iron ore belt. The Tomurtai Iron Mine has an iron ore reserve of 136.9 million tons and an average grade of 50% to 54%. The Bayan Hongge Iron Mine has an ore reserve of 110 million tons and an average grade of 52%. Tomoltai-Tologoyi iron ore mine with an ore reserve of 20 million tons and an average grade of 52% to 57%.

Copper (molybdenum): Mongolia's copper mineral resources are extremely rich and of high quality, with ore reserves of about 240 million tons. At present, the mining volume of Mongolian copper mine ranks 13th in the world. The Erdente copper-molybdenum mine has been listed among the world's top ten copper-molybdenum mines, ranking first in Asia. It is the largest foreign exchange earner in Mongolia, and its exports account for 30% of Mongolia's total exports. The copper (molybdenum) mineral resources of Mongolia are extremely rich, and they are concentrated in three tectonic volcanic belts of the Late-Ectozoic Early Paleozoic in the near-East direction, thus forming three near-East-oriented copper (molybdenum) ore belts, respectively called North Mongolian belt, Central Mongolia belt, and southern Mongolia belt. In Northern Mongolia, there is the largest Edent porphyry copper (molybdenum) deposit in Mongolia, located in the central part of the province of Bourges. The mineralization zone has a length of 28Km in the northwest, a width of 0.3-0.5Km and a depth of 500m. The secondary ore grade is Cu 0.3% to 7.6%, Mo 0.001% to 0.76%; the original ore grade Cu is 0.3% to 0.7%, and Mo is 0.008% to 0.026%. It is also associated with many useful components such as Au, Ag, As, Bi, Pb, Zn; in the southern Mongolia with the Chagansubul plus large porphyry copper (molybdenum) deposit, located in the semi-desert area of ​​the East Gobi Province, with 7 The discontinuous ore section has a main vein length of 1900m, a width of 500m, and a drilling control extension of 420m. The ore reserves are estimated to be 220 million to 240 million tons, including Cu 0.54% and Mo 0.19%. The associated gold reserves are 26 tons, silver is 1800 tons, and there are useful components such as Rh, Se and Te.

Gold: Mongolia has found more than 300 gold mines, with a geological reserve of 3,000 tons and a proven reserves of 160 tons. There are 50 mines that have been mined and are being prepared for mining, distributed in 16 gold metallogenic belts. The best development conditions are the North Kent gold belt, where 94.6% of Mongolia's proven gold reserves are concentrated. The ore belt is distributed in the northeast-southwest direction, with a length of 400Km and a width of 30-100Km. It has a gold deposit of 83.1 tons and a rock gold reserve of 52.2 tons. There is a famous Boroo gold mine in the ore belt, 130Km northwest of Ulaanbaatar. The main vein has a length of 2.5Km, a width of 800m and a depth of 300m. It generally contains Au-3~4g/ton, and the local area is 10g/ton. It is estimated to contain 40 tons of gold and can be exploited in the open air. On its periphery there is the Zaamar gold mine, with 150 gold veins containing Au 10-20 g/t. Both deposits are currently under development.

Silver: Mongolia's silver resources are mainly concentrated in the remote northwestern mountains. The Asgat silver mine discovered in 1976 has 11 mineralized belts with a single length of 1.5 to 12 km, a width of 5 to 80 m and a depth of 400 to 500 m. The ore contains Ag 100-450 g/ton, Bi 0.03%-0.09%, Sb 0.04%-0.7%, and cu 0.2%-1.7%. The estimated silver resource is about 8,000 tons.

Lead and zinc: concentrated in the eastern region, the more important deposits are the Tumuryan Ebo zinc mine and the Ulaan silver polymetallic deposit. The former has a zinc ore reserve of 7.7 million tons, including zn11.5%; the latter has an ore reserve of 68 million tons, containing Zn2%, Pb1.2%, Ag53g/ton, and Au0.21g/ton.

Tungsten and tin: mainly produced in the east and central, there are two more important northeast-southwest-oriented ore belts, and there are many small sand ore tin mines in the belt. In addition to sand and tin, the most prospective tungsten (tin, molybdenum) prospecting area is Wendur Chagan (OndorTsagan), 70 km east of Wendur Khan, with ore reserves of 186 million tons, including WO30.17% , MoO.2%.

Coal: Coal is the most abundant mineral resource in Mongolia. More than 200 coal beds that have been discovered and evaluated are distributed throughout the country, with a resource of 50 billion tons and a reserve of about 152 billion tons. The Carboniferous coal is mostly distributed in the Altai Mountains; the Permian coal is widely distributed in the south; the Jurassic coal is the main in the north. The most important thing is the Cretaceous coal, there are five major coal-basin, accounting for one-third of the eastern region. In recent years, the annual coal output of major coal mines in Mongolia is below 1,000 tons, far below the actual production capacity.

Phosphorus: More than 50 phosphate deposits have been discovered in Mongolia, with reserves of 5.7 billion tons, ranking first in Asia and fifth in the world. Distributed in the provinces of Kusugul and Zabu Khan in northern Mongolia.

Fluorite: Mongolia has found 60 fluorite deposits with a reserve of more than 30 million tons, mainly concentrated in eastern Mongolia. Borwendur is the most important fluorite production base in Mongolia, making Mongolia the third largest fluorite in the world. Mining country.

Uranium: Mongolia's uranium resources are abundant, with reserves of about 1.4 million tons, accounting for 23% of the world's uranium reserves, ranking the top 10 in the world. There are Mongolia's largest horse uranium mine, as well as the Harat ancient river sandstone uranium mine and the paleochannel sandstone uranium mine in the Sumin River area of ​​Hangai Province.

Mongolia's South Gobi Province and East Gobi Province, which border China, have huge reserves of copper mineralization. We should actively participate in the exploration and development activities in this area. Australia's BHP has discovered the largest copper mine in Mongolia in the exploration of Oyu Tolgoi in the South Gobi province, 70 km from the Sino-Mongolian border. The reserves are as high as 750 million tons and can be mined for 40 to 50 years. Canada's Ivanhoe has purchased the mine license, invested $30.8 million to continue exploration, and in July 2003, Mongolia and Canada signed a memorandum of cooperation to develop the Oyu Tolgoi copper mine. The development of iron ore in Mongolia should also receive attention. Currently, the Mongolian government is seeking investors to develop iron ore mines 150 kilometers north of the city of Dahan. The mine reserves are about 500 million tons, and the capital construction investment is expected to be 67 million US dollars. The Mongolian government also plans to build a direct reduced iron plant near the iron ore mine. This is also an opportunity for Chinese companies.

2.2 Mineral resources development potential

Mongolian mining is mainly concentrated in the north central and eastern parts. It is mainly composed of large and medium-sized enterprises engaged in the mining and processing of copper, coal, fluorite, gold, limestone and molybdenum. Among them, gold, copper and coal still retain state-owned enterprises, and most of them are joint ventures or private companies. Most of the construction stone, gravel, silica sand, tin and tungsten mines are small and medium-sized private enterprises, as well as small private enterprises that collect a lot of gold. In terms of oil and gas, foreign companies mainly conduct oil and gas exploration and development work by signing agreements or contracts with Mongolia.

Mongolia is the third largest producer of fluorite in the world and an important producer of copper and molybdenum. Erdente's copper-molybdenum mine is one of the world's top ten copper mines, with an annual output of about 5 million tons of copper concentrate powder, 95% of which is exported to China.

By the end of 2000, 94.6% of the country's land area had a geological mapping of 1:200,000 scale, and 15% of the country's land area had a geological map of 1:50,000 scale.

The degree of geological exploration in the entire country of Mongolia is relatively low. The regional geological surveys in Mongolia include general geological mapping and geochemical mapping, as well as hydrogeological and environmental geological surveys to identify regional geological structures, regional mineral resources classifications, types, distributions, and their metallogenic potential.

Mongolia's South Gobi Province and East Gobi Province, which border China, have huge reserves of copper mineralization. We should actively participate in the exploration and development activities in this area. Australia's BHP Company has discovered the largest copper mine in Mongolia in the exploration of Oyu Tolgoi in the South Gobi Province, 70km from the Sino-Mongolian border. The reserves are as high as 750 million tons and can be mined for 40 to 50 years. Canada's Ivanhoe has purchased the mine license, invested $30.8 million to continue exploration, and in July 2003, Mongolia and Canada signed a memorandum of cooperation to develop the Oyu Tolgoi copper mine. The development of iron ore in Mongolia should also receive attention.

2.3 Mining cooperation situation

To achieve rapid economic development, the source of funds is the main problem facing the Mongolian government. Since the 1990s, the Mongolian government has begun to realize the important role of foreign capital and foreign advanced technology in developing its own economy. It has begun to formulate a series of preferential policies and promises to provide quality services and a fair and stable legal environment for foreign businessmen. The government uses various international occasions to promote Mongolia to attract the attention of international investors and actively create favorable conditions for foreign entrepreneurs to invest in Mongolia. In 2001, the Mongolian government identified a list of key industries for attracting foreign investment, including agriculture, animal husbandry, mining, processing, infrastructure, and construction. In the mining industry, the coal mining, oil and gas exploration, uranium, thorium mining, iron and copper, zinc, tin, tungsten, molybdenum and gold, silver, rare metals (niobium, tantalum, zirconium, etc.), strontium Metal mining is listed as a key point.

The border between China and Mongolia is 4,677 kilometers long, and many Mongolian resources are distributed in the border areas of China and Mongolia. Mongolian copper, gold, coal, uranium and oil are mainly distributed in the western, southern and eastern provinces bordering China.

Mongolia has relatively rich oil resources, but its domestic oil demand is relatively low, and China’s rapid economic development is increasingly demanding oil, and it has advanced technical experience and equipment in oil drilling and mining, which makes China and Mongolia Cooperation in oil development is highly complementary. Since the first oil well was mined in 1997, Mongolia has produced more than 30,000 tons of crude oil and exported it to China. Due to the many similarities between the geographical structure of the two countries, the oil deposits discovered in Mongolia are basically concentrated in the border areas of China and Mongolia. There are 13 large oil basins with reserves of more than 3 billion barrels. This is China and Mongolia. Cooperation in the field of oil exploration has facilitated.

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