Managing mining leases in Mongolia

Mongolia’s 2015 EITI Report highlights impact and gaps in mining licensing

Amongst most tangible improvements in Mongolia’s oil, gas and mining governance during the ten years of EITI implementation has been in the management of mining licenses. Yet there is still room for fine-tuning the system, the country’s tenth EITI Report highlights.

Online and switched on

When Mongolia first started implementing the EITI in 2005, the government managed its licenses using a handwritten-ledger license register, operating a first-come-first-served system highly prone to human discretion. Since then, reforms supported by the World Bank following recommendations from successive EITI Reports have had a stark impact.

Long in the making, a cadastral portal came online in 2014. In 2015, what is now the Mongolian Resources and Petroleum Authority of Mongolia (MRPAM) launched a one-window registration service for exploration license applications, providing for real-time public oversight of the status of applications. Mongolia’s 2015 EITI Report further clarifies the license allocation and transfer procedures for the main types of mining licenses.

Keeping track

Yet the latest EITI Report also identified weaknesses within the mining regulator’s systems. Documents from different departments in MRPAM showed divergent numbers of license applications and transfers in 2015. An important recommendation from the report is for MRPAM to ensure consistent tracking of licenses across its departments. The UNDP’s June 2016 report on corruption risks in Mongolia’s mining sector is cited, noting risks in the license allocation process given the absence of an integrated data system and the lack of detailed regulations on the input of local government officials and citizens’ assemblies during license awards. The report notes that the absence of detailed procedures on approving or rejecting license applications leaves space for potential human interference.

Mongolia’s 2015 EITI Report comes as a diagnostic of the oil and mining sectors at a key time, following the country’s first Validation under the EITI Standard. It highlights key areas for reform in the management of state-owned enterprises to the country’s auditing practices, broadly in line with the new Mongolian government’s reform agenda.

Access the Mongolia 2015 report.

For more information about the EITI process in Mongolia please visit the country page on eiti.org or consult the national EITI website.