Strategic Deposit Holders Support Fair and Equitable Resource Distribution
On May 11, Prime Minister N. Uchral met with the license holders of Mongolia's strategically important mineral deposits. During the meeting, the government announced its intention to urgently submit a draft bill to Parliament aimed at formalizing state ownership stakes in strategic deposits and their derivatives. The legislation will channel these assets into the Sovereign Wealth Fund, ensuring the Mongolian public receives the majority of the nation's subsoil wealth.
Representatives of the strategic deposits expressed their support for these equitable principles. They noted that clarifying regulations, improving the investment climate, and resolving lingering uncertainties will have a net positive impact on businesses, the broader economy, and the citizens of Mongolia.
Key Provisions of the Draft Bill
- Clearly define the yields and benefits derived from strategic deposits and their derivatives.
- Ensure a minimum of 60% of these benefits are distributed directly to the public.
- Introduce a regulatory fee if public benefits fall below the 60% threshold.
- Replace direct state equity percentages in strategic deposits with a special mineral royalty.
Establishing this legal framework will ensure the steady growth of the Sovereign Wealth Fund’s Accumulation Fund, directly translating to higher returns for citizens. Under the current 2024 Sovereign Wealth Fund Law, dividends from state-owned and partially state-owned mining companies are already being centralized into the Accumulation Fund. Through the e-Mongolia digital platform, individual citizen accounts received 178,000 MNT in 2024 and 306,000 MNT in 2025. The government is targeting a payout of 500,000 MNT per citizen by the end of 2026.
Prime Minister Uchral emphasized that negotiating state ownership with each individual license holder would be time-consuming and risks creating an uneven playing field. A comprehensive, unified law ensures fairness and prevents discrimination among operators. This approach guarantees that citizens benefit promptly from the nation's resources while providing investors with a stable and transparent legal environment.
"Since its formation, the government has been focused on realizing the 'Liberate' deregulation initiative," Prime Minister Uchral stated. "Mongolia views the private sector as the primary engine of economic growth and our investors as long-term strategic partners. We stand firmly by this principle. The main goal of today's meeting is not to complicate the business environment, but to resolve years of accumulated uncertainty and build a stable, predictable, and clear legal framework."
The draft bill is currently being developed by a government-appointed working group, with professional advisory support provided by Chinggis Khaan Sovereign Wealth Fund LLC.
Background Note: The Mongolian Parliament's Resolution No. 27 of 2007 officially designated 16 mineral deposits as strategically important, while identifying another 39 deposits for potential inclusion. While state ownership percentages have already been established for several of the original 16 deposits, negotiations to formalize the remaining assets are currently underway.
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