You will come across the word “strategic” frequently in the present issue of the MMJ, especially on the pages in Mongolian. One reason for this is that this issue covers various aspects of the law regulating foreign investment in strategic sectors. Another is that we begin in this issue a comprehensive introduction to the 39 deposits listed as strategic. Our editor,N.Ariuntuya, has covered 13 deposits to begin with, giving their location, licence ownership, nature of minerals held, and whether their shares are traded on international bourses. The report will be continued in the July issue.
Another articleanalyses the implications of the now legalized requirement that the Mongolian State must own not less than 51 percent of the shares in any strategicdeposit.S.Bold-Erdene reports on the mining “policy” of the major political parties as defined in their campaign manifestos for the election later this month. This will give you an idea of the likely direction of themineral legislative environment in the next four years, depending, of course, on who forms the government and the parties’ relative numerical strength in the new Parliament.
In a bid to place the Mongolian situation in perspective, we report on how other countries, particularly Australia, deal with theirownstrategic sectorand how they regulate it. The study has been prepared by Elisabeth Ellis at MinterEllison. In Australia, any proposed foreign investment of more than A$231 million in a domestic company is scrutinized by the Foreign Investment Review Board whose job is to ensure that the national interest is protected. Elisabeth shows that some publicised cases where foreign investment was disallowed notwithstanding, Australiahas generally and readily welcomed foreign investment. This is in sharp contrast to our recently passed law which could very well end up scaring away foreign investment in the strategic sector because of overregulation. Legal analysts are also not sure if several of the proposed regulations can be effectively implemented.
What we have been hearing from different parties fills us with concern for the future of the mining industry. True, electoral campaigns bring out the demagogue in candidates but it is worrying that most manifestos also call for wider and stricter regulation in the mining sector.Foreign investors in particular will be keeping their fingers crossed until all competition to win votes is over and a clear idea is available of how the new government plans to move.
We are happy to say that only the MMJ has covered the issues in such detail and from so many angles.
Bolormaa Luntan, Editor in Chief