Parliament Advances Long-Awaited Draft Minerals Law to Boost Investment and Critical Minerals Development
The Parliament of Mongolia has approved the continued consideration of the country's long-awaited draft Minerals Law, marking one of the most significant proposed reforms to Mongolia's mining sector in nearly two decades.
Mining remains the backbone of Mongolia's economy, contributing 22% of GDP, 71% of foreign direct investment (FDI), and 94% of total exports. The proposed legislation aims to strengthen the country's mineral resource base, attract new investment, improve regulatory certainty, and support the expansion of Mongolia's National Sovereign Wealth Fund.
Key Highlights
• Modernizing mineral licensing — The draft law proposes new methods for issuing exploration licences after exploration activity declined significantly over the past decade. Policymakers believe the current licensing system has limited investor access to prospective exploration areas.
• Focus on Critical Minerals — For the first time, the law introduces a dedicated legal framework for critical minerals, recognizing their growing strategic importance in the global clean energy transition. Mongolia plans to establish its own national list of critical minerals, promote exploration, attract investment, and develop international partnerships.
• Improved regulation of mineral processing and artisanal mining — The legislation introduces legal requirements for exploiting derivative mineral deposits created during mineral processing. Artisanal and small-scale mining activities would become more formally regulated through registration, royalty payments, and operational reporting.
• Stronger environmental accountability — Mining companies would be required to provide financial guarantees for mine rehabilitation and closure before project development. Rehabilitation deposits would only be returned after technical and biological restoration has been successfully completed.
• Copper royalty reforms under review — The draft seeks to align Mongolia's copper royalty regime more closely with international standards to encourage new investment and increase copper production. However, Parliament has postponed changes to copper royalty provisions while negotiations continue with Entrée Resources regarding the Javkhlan and Shivee Tolgoi deposits.
• Potential production growth — The Government estimates the reforms could increase Mongolia's annual copper concentrate production by up to 47%, from approximately 2.1 million tonnes to 3.3 million tonnes, while enabling more than 20 advanced mining projects to move toward development.
Why It Matters
If adopted, the revised Minerals Law could significantly improve Mongolia's investment environment by modernizing exploration licensing, establishing a legal framework for critical minerals, strengthening environmental standards, and supporting long-term growth of the country's mining sector. The legislation also reflects Mongolia's ambition to become an important supplier of critical minerals for the global energy transition while balancing economic development with responsible resource management.
This article is a summary prepared by AQSORA based on reporting by The Mongolian Mining Journal.