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Mongolia has been talking about reforming its Minerals Law for a long time. Last week, the Cabinet finally moved — approving a package that revises up to 50% of the existing framework and puts it before Parliament this spring. We've examined the bill. Here's what actually changes, what it unlocks, and what investors should be watching.
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🟣 Mongolia's Minerals Law: The Overdue Reform Is Now on Parliament's Desk
Last week, Mongolia's Cabinet approved long-overdue amendments to the Minerals Law — legislation that has been discussed for the better part of a decade and is finally on Parliament's desk. The bill revises up to 50% of the existing framework and targets five structural failures in one go: royalty distribution, the stalled copper pipeline, exploration licensing, processing regulation, and critical minerals — all areas where the current law has been visibly failing.
The amendments address structural problems that have compounded for over a decade: chronic underinvestment in exploration, a weak domestic processing sector, inequitable distribution of mining revenues between central and local governments, and a pipeline of economically viable copper projects that cannot move forward under current royalty conditions.
Five key amendments: Each targets a structural failure the sector has lived with for twenty years
Royalty distribution — rewarding host communities.
Local governments have had too little financial stake in the mining operations on their doorstep — and it has shown. The amendments raise the royalty share directed to local government fund from 10% to up to 20%, and shift from blanket province-level disbursement to a performance-weighted formula that reaches down to the district level, scoring communities on population, remoteness, active license count, and cooperation with responsible mining operations. The financial incentive to obstruct becomes a financial incentive to facilitate.Copper — breaking a two-decade logjam.
Twenty-two copper projects with approved feasibility studies are sitting idle, stranded by royalty rates that make their economics globally uncompetitive. The amendments cut the price-linked surcharge on copper roughly in half across all product tiers — ore surcharges drop from 22–30% to 11–15%, and concentrate from 11–15% to 1–5%. The current disparity is stark: Erdenet bears an effective total royalty burden near 21.6%, while Oyu Tolgoi pays 5% under its IA. "Activating the copper sector will advance more than 10 pending projects — this would increase our export capacity by 50%," said Damdinnyam G., Minister of Industry and Mineral Resources.Exploration — from license trading to actual geology.
Mongolia has more mining licenses than active exploration licenses — a pipeline running in reverse. The fix is structural: maximum license tenure is simultaneously halved from 12 to 6 years, fees raised sharply — draining the value from dormant license-holding and pushing capital toward companies committed to real drilling programs.Processing — closing the regulatory gap.
Mongolia extracts and exports. Value-added processing has remained largely outside formal legal oversight — and domestic processors have paid the price through feedstock shortages and unworkable economics. For the first time, mineral beneficiation without a mining license will require its own dedicated license, bringing the activity within a formal regulatory perimeter. The framework is designed to underpin downstream industrialization, including coal-chemical and steel complex projects in the government's 2024–2028 program…
🇲🇳 Mongolia Investment Forum: Shanghai 2026
With just three weeks remaining until the big day, Capital Markets Mongolia (CMM) invites you to secure your place at the inaugural Mongolia Investment Forum: Shanghai 2026.
We invite you to reserve your place below. Seats are limited, and registration is subject to confirmation.
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