Mongolia Targets 14pc Growth, Investments
Mongolia wants to achieve annual economic growth of 14 percent over the next eight years, powered by foreign investment and cheaper capital as it taps centers like Hong Kong, a government official said. All sectors of the resource-rich country, which borders Russia to the north and China to the south, are open to foreigners, Sedbazar Otgonbat, adviser to the Minister of Industry and Trade, told an investment forum in Hong Kong yesterday.
He said the country had a liberal investment regime and its mining projects could also be 100 percent operated by foreign companies without local partners, except for strategic projects.
Strategic projects are defined as those with revenue exceeding 5 percent of Mongolia’s gross domestic product, which stands at about US$3 billion. The Mongolian parliament is expected to amend its mining law within weeks which may give the government the option of seeking a 51 per cent share of strategic projects instead of the current level of 34 per cent.
Mr. Otgonbat said Mongolia, which has extensive mineral deposits including copper, coal, molybdenum, tin, tungsten and gold, offered tremendous opportunities for foreign investors. The capital needed to develop the southern part of the country, including infrastructure and mining projects, would total US$80 billion.
Many foreign companies have invested in Mongolia. Mining giant Rio Tinto was investing in the Oyu Tolgoi copper and gold project in the south Gobi region, Mr.Otgonbat said.
China Shenhua Energy, the mainland’s biggest coal producer, was negotiating with the Mongolian government to help develop the Tavan Tolgoi coal deposit, which had proven reserves of at least 6.5 billion tones of coking coal, he said.
He said he was hopeful the deal could be concluded this year.
Chinese companies have been boosting investments in Mongolia and increasing mineral imports from the country.
China would continue to have a significant impact on the development of Mongolia’s mining industry in the foreseeable future, Mr.Otgonbat said.
He said Mongolia, which had benefited from the commodity boom, aimed for 14 per cent annual GDP growth between now and 2015, and the mining industry would be a major component of that.
SOUTH CHINA MORNING POST
FRIDAY, APRIL 11, 2008
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