B.Altsukh, senior specialist at the Fuel Policy Department in the Ministry of Mineral Resources and Energy, answers questions from E. Bolorkhajid.

What is the state policy on coal?

Let me first give you a brief account of the coal sector. All our mining and energy work began when coal was extracted from the Nalaikh mine. It was a very important sector during the socialist era and was run by two large centralised agencies, the Coal Production Unit, and the Central Energy System. Everything was done according to the Russian system. This posed big challenges for Baganuur and Shivee Ovoo coal mines during the shift to the market economy in the 1990s.

The Government of Japan formulated a master plan for the sector which it implemented together with the World Bank by injected large sums of money into the sector. The World Bank invested over USD50 million in modernising the Baganuur mine, while the Government of Japan extended soft loans worth USD70 million to projects in Shivee-Ovoo and Baganuur mines. Japan also funded technical reform projects in 10 small mines. These were all done between 1997 and 2002. The mid-1990s were marked by interruptions in coal supply leading to frequent power cuts when people had to wear warm outer clothing inside houses. Thanks to the reforms, operations in the coal sector stabilized. But fresh needs are being felt now.

The 1996-2000 Government had a Coal Department, an implementing agency with 70 staff.  There was also a Fuel Department with 20 workers affiliated to the Energy Agency. Both were dismantled when a new Government took over in 2000. Instead, a new Ministry of Fuel and Energy was established. This had a fuel policy coordination department which had ten workers responsible for the coal sector. That agency was abolished when a new Government took over in 2008, and the number of staff responsible for coal was further reduced.

The present Fuel Policy Department at the Ministry of Mineral Resources and Energy has nine employees overseeing the coal, oil and gas sectors. It has a Director and a Deputy Director who are above four people responsible for oil, two for gas and one for air pollution. Another person and I supervise the coal sector. It is hard for just the two of us to be responsible for such an important and large sector, formulate policy, monitor its implementation, and ensure proper information flow. However, we have managed to keep things going well. Our work runs from policy making to taking care of technical breakdowns and interruptions in coal supply.

Once the Mining Department in the Ministry of Industry and Commerce had the responsibility for granting both exploration and mining licenses. However, when the fuel sector became part of the energy sector in the Ministry of Fuel and Energy, its responsibility was restricted to only mining and supplying coal to the power stations. There was much debate during the formation of the present Government  on  transferring fuel from the mining to the energy sector, which would mean merging the producer and the consumer. Coal is the main international source of energy and cannot be split from the energy sector and made to work independently. It was thus correct to have a ministry responsible for both mineral resources and energy, but it was anomalous to have a  fuel policy department which does not have anything do with either mining or energy. The number of staff also decreased drastically and people with professional qualifications were not brought in.


Lately, there have been complaints that the appointment of non-professional officials at the policy formulation level causes delays and other problems.

This is a serious matter. Lately, professional people have been largely marginalized. Important posts have gone to those with active party affiliation. They have little interest in developing long-term policy. Their only concern is their personal interests during the term of the Government. A professional’s loyalty is to the sector and he would strive to put in place good policies, but political appointees do not have such a mindset as they know they will stay in the job only as long as the Minister who appointed them remains one. This has had a very bad impact on both efficiency and morale. If a professional person is found unsuitable for a particular position, he can be moved to another where he would be more effective. The sane approach is to get people who can contribute in some way or the other. I’m not saying that all appointments have been bad but the interests of Mongolia will not be served by people who run after positions and are not willing to learn. The cleverer among them spend more time picking a godfather and then staying in his good books than in learning about the job. No wonder that the sector suffers from a lack of professional management and impersonal commitment. The current situation would be very different if we had people with a long term vision like those in the 1990s when we received foreign aid.

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