Providing Expert Support to the Government Working Group on Strategic Deposit Negotiations

To increase the capital sources of the Sovereign Wealth Fund, "Chinggis Khaan Sovereign Wealth Fund" LLC is actively providing professional support to the Government Working Group in negotiations with license-holding legal entities of strategically important mineral deposits. Our team is developing the financial calculations and research necessary to determine the State’s ownership stake and evaluating options to substitute it with a Special Royalty.

During today’s regular Cabinet meeting, Prime Minister N. Uchral tasked the Working Group with drafting the bill, “On Determining the State’s Ownership Stake in Strategically Important Mineral Deposits and Their Derivative Deposits, and Allocating Them to the Sovereign Wealth Fund,” for presentation at a future Cabinet session.

The initial Working Group was established by the Prime Minister’s decree in October 2024 to accelerate the implementation of the Sovereign Wealth Fund Law and clearly define the State’s share in strategic and derivative deposits. Over this period, the group has conducted phased meetings and successfully reached agreements in principle with four legal entities: Energy Resources LLC, Khangad Exploration LLC, Usukh Zoos LLC, and Achit Ikht LLC.

However, the negotiation process has faced delays due to several factors. These include passive participation from certain legal entities, disparities during negotiations, the necessity for independent experts to review the State's ownership stake or Special Royalty options, ambiguities in the return structure and calculation methodologies, and the requirement for some deposits to approve updated Feasibility Studies.

To resolve these bottlenecks and move forward, the Prime Minister has issued the following directives:

• Determine the State’s ownership stake in strategic deposits without creating undue burdens on the private sector.
• Ensure the principle that the majority of natural resource yields are distributed to citizens through the National Sovereign Wealth Fund, utilizing a yield adjustment fee if necessary.
• Actively support mutually beneficial public-private partnerships.
• Ensure a clear, predictable, and stable investment environment.