amendment minerals law 2017.11.10

Unofficial translation

LAW OF MONGOLIA

Date: 10 November 2017 Ulaanbaatar city

MINERALS LAW

Article 1. Purpose of the law

1.1. The purpose of this law is to regulate relations within the territory of Mongolia with respect

to prospecting, exploration, and mining of minerals and protection of exploration area and

mining claim environment.

/This section was amended by the legislation enacted on the 8th

of January 2009/

Article 2. Legislation on minerals

2.1. The Mineral Law consists of the Constitution of Mongolia, the Subsoil Law, the Land Law,

the Environmental Protection Law, the National Security Law, the Investment Law, this Law and

other legislative documents enacted in conformity therewith.

/This section was added by the legislation enacted on the 17th

of May 2012/

/This section was added by the legislation enacted on the 3rd

of October 2013/

2.2. If an international treaty to which Mongolia is a party provides otherwise, the provisions of

the international treaty shall prevail.

Article 3. Scope of this law

3.1 This law shall regulate relations with respect to prospecting, exploration and mining of all

types of mineral resources except water, petroleum, natural gas, radioactive and common

minerals.


of July 2009/


of January 2014/

3.2 Relations regarding exploitation of minerals from micro mines shall be regulated procedures

and such procedures shall be approved by the Government.

/This section was amended by the legislation enacted on the 1st of July 2010/

3.3.Relations regarding exploration and mining of common minerals shall be regulated by

specific law.

/This section was added by the legislation enacted on the 1st of July 2014/

Article 4. Definition of terms

4.1 In this law the following terms shall have the following meaning:

4.1.1 “mineral” means any usable, naturally occurring mineral concentration that formed

on the surface or in the subsoil as the result of geological evolutionary processes;

4.1.2. “radioactive minerals” means mineral concentration that consists of uranium and

thorium-type radioisotopes

/This provision was added by the legislation enacted on the 16th

of July 2009/

4.1.3 “reconnaissance” means an investigation identifying mineral concentrations without

disturbing the subsoil through rock sampling, airborne surveys, and reviewing related geological

and minerals information;

/Numbering of this provision was amended by the legislation enacted on the 16th

of July 2009/

4.1.4 “geological survey to be conducted at expenses of State fund” means geological

mapping, thematic survey, geological prospecting and exploration of minerals to be conducted

by the State fund;


of July 2009/

4.1.5 “mineral prospecting” means a geological survey the purpose of which is to identify

the existence of mineral concentration in prospective areas of mineral resources;


of July 2009/

4.1.6 “mineral exploration” means geological and exploration survey conducted on and

under the earth's surface for the purpose of identifying the location and quantity of mineral

concentration in detail and determining the technical and commercial feasibility of mining such

mineral concentration;


of July 2009/

4.1.7 “mineral mining” means the entire range of activities that include separating and

extracting minerals from land surface and subsoil, ore stockpile, waste or tailings, increasing and

enriching the concentration of its usable contents, producing products, marketing those products

and other activities related therewith;


of July 2009/

/This provision was added by the legislation enacted on the 1st of July 2014/

4.1.8 “minimum cost of exploration” means an obligatory minimum expenditure to be

spent for exploration work in each year;


of July 2009/

4.1.9 “mineral deposit” means mineral concentration that has formed on the surface or in

the subsoil resulting from geological evolutionary processes, where the quality and quantified

reserves are economically feasible to mine by industrial means;


of July 2009/

4.1.10 “hard rock mineral deposit” means any mineral concentration that has formed as a

result of geological evolutionary process and exists in the same space with its host rock;


of July 2009/

4.1.11 “placer mineral deposit” means any mineral concentration that has been separated

from its first host rock due to erosion and mechanic processes and that has formed layers after

reformation


of July 2009/

4.1.12.“The Minerals Deposit of strategic importance” means a deposit of a size that may

have impact on national security, economic, or social development of the country, or that is

producing or has a potential of producing more than five percent of total gross domestic product

of Mongolia in a year.


of July 2009/

/This provision was amended by the legislation enacted on the 1st of July 2014/

4.1.13 “special purpose land” means land that is taken by competent authority pursuant to

Articles 17, 18, and 20 of Land Law for local or national special needs where prospecting,

exploration and mining activities are restricted or prohibited;


of July 2009/

4.1.14 “reserve area” means an area that was previously allocated under exploration or

mining license which is now taken under the State control by a decision of competent authority

ceasing any prospecting, exploration or mining activity;


of July 2009/

4.1.15 “exploration license” means a document granting the right to prospect or explore

as set forth in this law;

/Numbering of this provision was amended by the legislation enacted on the 16th of July 2009/

4.1.16 “mining license” means a document granting the right to conduct mining as set

forth in this law;


4.1.17 “exploration area” means the area that is allocated under a license as set forth in

Clause 4.1.15 of this Law;

/This provision and numbering of this provision was amended by the legislation enacted on the

16th of July 2009/

4.1.18 “mining area” means the area that is allocated under a license as set forth in Clause

4.1.16 of this Law;

/This provision and numbering of this provision was amended by the legislation enacted on the

16th of July 2009/

4.1.19 “mining claim” means part of a geological formation overlapping with a mining

area where exploitation of minerals is to be conducted;


4.1.20 “license fee” means the payment that a license holder makes as set forth in this law

in order to maintain the license effective;


4.1.21 “license holder” means a legal entity which is obtained the right to prospect,

explore or mine minerals or received by transfer such right in accordance with conditions and

procedures as set forth in this law;


4.1.22 “legal entity” means a company or a partnership as set forth in Article 33.1 of the

Civil Code of Mongolia.


4.1.23.“Micro mining” means activities of citizens organized, in forms of unregistered

partnership stipulated in Article 481.1 of the Civil Code, partnership stipulated in Article 35 and

cooperative stipulated in Article 36.4 of the Civil Code, for the purpose of exploiting minerals in

the areas of economically non-profitable deposit for industrial operation and derivative deposit

formed by operational and technological wastes.


/This provision was re-edited by the legislation enacted on the 1st of July 2014/


of November

2016/

4.1.24. “mineral wealth” means a mineral concentration which its amount, type, content,

mineral concentration and economic significance are not estimated in detail through

geographical mapping, thematic survey and prospecting and exploration activities;


4.1.25. “reserve of minerals deposit” means a part of the mineral wealth which its

amount, type, content, mineral composition are determined in detail through exploration

activities, having economical profit when exploiting by industrial means, and which it

enrichment technology and mining-technical conditions of exploitation are determined;


4.1.26 “professional specialist, analyst” means a citizen who is authorized by a non-

governmental organization of geology and mining sector and has been nationally and

internationally is recognized;


4.1.27 “derivative deposit” means an ore and mineral stockpiles which has certain

amount of accumulation created in the process of exploration, processing, and enrichment and

would have economically benefit when reprocessing;

/This provision was added by the legislation enacted on the 10 of November 2016/

4.1.28 “using derivative deposit” means operations conducted to distinguish mineral

resources from the ore and mineral stockpiles defined in the Clause 4.1.27 of this law, to process,

enrich, and to produce and sell value added products and any other related activities;


of November 2016/

Article 5. Ownership of minerals

5.1 Mineral resources naturally occurring on and under the earth's surface in Mongolia are the

property of the State.

5.2 The State, as the owner, shall have the right to grant prospecting, exploration and mining

license to other other persons in accordance with the conditions, requirements and procedures

provided by this law.

5.3. If the reserve of a mineral deposit is determined through a prospecting or exploration that is

funded by the State budget, the percentage of the state ownership in a mineral deposit shall be

determined by an agreement on exploration of the deposit. The percentage of the state ownership

can be replaced by the royalty payment for using the minerals deposits of strategic importance;


of February 2015/

5.4. If the reserve of a mineral deposit of strategic importance that was determined through the

State funded exploration is to be used jointly with a private legal entity, the rate of the state’s

participate may be up to 50 percent, and that rate shall be determined by agreement on

exploitation of the deposit considering the amount of investment made by the State. The

percentage of the State ownership can be replaced by the royalty payment for using the mineral

deposits of strategic importance.


of January 2009/


of February 2015/

5.5. . The State may own up to 34% of investment made by a license holder in a mineral deposit

of strategic importance where the reserves was determined through funding sources other than

the State fund. The percentage of the State ownership shall be determined by an agreement on

exploitation of the deposit considering the amount of investment to be made by the State. The

percentage of state ownership can be replaced by the royalty payment for using the mineral

deposits of strategic importance.

/This section was amended by the legislation enacted on the 8th of January 2009/


of February 2015/

5.6 A legal entity holding a mining license for a mineral deposit of strategic importance shall sell

no less than 10% of its shares through the Mongolian Stock Exchange.

Article 6. Classification of mineral deposits

6.1 Mineral deposits are classified as following:

6.1.1 mineral deposits of strategic importance;

6.1.2 common mineral deposits;

6.1.3 ordinary mineral deposits.

6.2 Mineral deposits set forth in Clause 6.1.1 of this law shall refer to the deposits which meet

the requirements of Clause 4.1.12 of this law.


of July 2009/

6.3 Abundant sediments and rock concentration that are available to be used as construction

materials are considered common mineral deposits.

6.4 All mineral concentrations except as set forth in Articles 6.2 and 6.3 of this law shall refer to

common mineral deposits.

Article 7. General requirements for license holders and for conducting mineral prospecting,

exploration and mining activities

7.1 Exploration and mining license shall be granted to a legal entity duly established and

operating under the laws of Mongolia and which is a taxpayer in Mongolia through selection

process unless otherwise provided by this Law.

7.2 A license holder shall meet the requirements set forth in Article 7.1 of this law for the entire

duration of a valid license.

7.3. It shall be prohibited to prospect, explore and mine mineral resources without a license

except for exploring mineral resources through micro mines. Prospecting and exploring natural

colored stone and gem stones shall be conducted based on a license similar to common minerals.


/This subsection was re-edited by the legislation enacted on the 1st of July 2014/

7.4 One license shall be granted to one legal entity only.

7.5 Landowners or land-possessors may use common minerals from their land for private and

noncommercial purposes. A list of common minerals that can be mined without a license shall be

approved by the Government.

/This section was considered as annulled by the legislation enacted on the 16th

of January 2014/

7.6.Цөмийн энергийн тухай хуулийн дагуу цацраг идэвхт ашигт малтмал эрэх, хайх,

ашиглах тусгай зөвшөөрөл олгох шалгаруулалт явуулахаар цөмийн энергийн асуудал

эрхэлсэн төрийн захиргааны байгууллагаас геологи, уул уурхайн асуудал эрхэлсэн төрийн

захиргааны байгууллагад мэдэгдэл ирүүлсэн бол тухайн талбай дээр уг асуудлыг

шийдвэрлэх хүртэлх хугацаанд ашигт малтмалын хайгуулын болон ашиглалтын тусгай

зөвшөөрөл олгохгүй.

/This section was added by the legislation enacted on the 16th of January 2014

/This section was considered as annulled by legislation enacted on the 13th

of February 2015/

7.7.If an exploration and mining license area overlaps with the areas allocated under the Law on

Oil, Nuclear Energy Law and Law on Common Mineral Resources and the persons holding the

right to carry out operations on these areas not able to mutually agree, then the State

administration organization in charge of geology and mining issues shall resolve this under the

regulation approved by the Cabinet through privatizing based on its social and economic

significance.

CHAPTER TWO

STATE REGULATION IN MINERALS SECTOR

Article 8. The full powers of State Ikh Khural

8.1 The full powers of State Ikh Khural with respect to mineral issues are as follows:

8.1.1 establish State policy with respect to development of the geology and mining

sectors;

8.1.2 exert control over work organized by the Government in relation to implementation

of legislation on minerals prospecting, exploration and mining activities;

8.1.3 resolve matters concerning mineral prospecting, exploration and mining activities in

state special protected area;

8.1.4 include or remove a mineral deposit from a list of mineral deposits of strategic

importance by submission of the Government or on its own initiative;


8.1.5 restrict or prohibit mineral prospecting, exploration and mining activities on or

granting of exploration and mining licenses for certain territories by submission of the

Government or on its own initiative;

8.1.6 establish a special regulatory regime for mining, storage and transport of

radioactive minerals;

/This provision was considered as annulled by the legislation enacted on the 1st of July 2014/

8.1.7 determine the State’s ownership percentage of mineral deposits of strategic

importance as set forth in Articles 5.5 and 5.6 of this law or based on the size of the minerals

deposit registered in the State’s integrated registry by submission of the Government or by its

own initiative.

Article 9. The full powers of the Government

9.1 The full powers of the Government with respect to mineral issues are as follows:

9.1.1 ensure implementation of laws and legislations on mineral prospecting, exploration

and mining activities;

9.1.2 implement State policy regarding the development of geology and mining sectors;

9.1.3 resolve matters concerning mineral prospecting, exploration and mining in special

purpose land except state special protected area;

9.1.4 submit proposals to include or remove particular mineral deposit from a list of

mineral deposits of strategic importance to the State Ikh Khural;


9.1.5 submit proposals to determine the percentage of the State ownership of a minerals

deposit of strategic importance to the State Ikh Khural;

9.1.6 resolve matters concerning source of investment to be made by Mongolia in a joint

venture to exploit a mineral deposit of strategic importance;

9.1.7 resolve issues or submit proposals to the State Ikh Khural with regard to setting

aside specific areas for reserve or special purpose land;

9.1.8 participate in mineral prospecting, exploration and mining activities through a legal

entity having state ownership.

9.1.9. establish National geological institution;


9.1.10. approve the contract template defined in Article 42.1 of this Law


9.1.11. define areas for granting exploration license or mining license in cases other than

as provided by Article 24.1 of this Law by coordinates based on the opinion from the State

central administrative body in charge of geological and mining affairs, and inform to the public;

9.1.12. define boundaries of deposit of strategic importance;


9.1.13. when transferring licensed areas to the state ownership for purposes of ensuring

national security, implementing large-scale projects that will impact on national economic and

social development and taking the areas for special purpose, and resolving issues regarding

compensation, a license may be granted from areas with minerals concentration that have been

established during geological survey carried out with the government budget fund and 26.9 of

this Law based on agreement with the license holder.


9.1.14. approve procedures concerning activities related to granting licenses for using

derivative mines


of November 2016/

9.1.15. approve requirements on use of derivative mines and procedures concerning

conducting activities related to using derivative mines;


of November 2016/

Article 10. Full powers of State central administrative body

10.1 The full powers of the State central administrative body in charge of geological and mining

affairs shall exercise the following powers in mineral affairs:

10.1.1 develop and ensure implementation of State policy with respect to the

development of the geology and mining sectors;

10.1.2 upon authorization by the Government, approve of the tender procedures set forth

in Article 19.1220.1, 24.2, 26.9 and 60.9 of this Law;

10.1.3 ensure enforcement of the legislation on minerals and resolutions of the

Government with regard to implementation of such legislations;

10.1.4 determine service fee rates for obtaining, extending or transferring a license,

handing over a licensed area wholly or partially, having boundary disputes resolved and

activities with respect to having exploration work plans, information and reports reviewed;

10.1.5.approve and clarify work plans, projects and budget of annual geological surveys

to be conducted by the State funds and make a decision regarding receipt of results report.

/This provision was re-edited by the legislation enacted on the 1st of July, 2014/

10.1.6 approve procedures for financing, performing works for geological survey to be

conducted by the State fund and assessing results of such works;

10.1.7. approve procedures with respect to mineral prospecting, exploration and mining

activities, and to develop and have product standards approved;

10.1.8. exert control over activities related to the exploitation of mining deposits of

strategic importance;

10.1.9. establish a Mineral resources professional council that consists of qualified

specialists who has the duty to assess and make recommendations on work plan of geological

research conducted within the territories of Mongolia and feasibility study for mineral deposits

mining and enriching plants and approve its charter and computation methods for works fee of

specialists.


10.1.10. ensure the transparency of activities related to prospecting, exploring, mining,

and selling of minerals.


of January 2014/

10.1.11. approve procedures concerning the acceptance of mining, processing and

enrichment plants.


10.1.12. approve requirements and procedures concerning the operations of an

enrichment plants.


10.1.13. establish ad hoc council ensuring equality of representation of state

organizations, investers, professional unions, and non-governmental organizations with purposes

of making recommendation and supporting implementation of the State policy in mineral

resources sector and approve its members and working procedures.


10.1.14. approve procedures on reclamation and closure of mine, processing and

enrichment plants jointly with a State central administrative body in charge of the environment.


10.1.15. approve procedures for activities of carrying out geology, mining and minerals

database.

/This provision was added by the legislation enacted on the 1st

of July 2014/

10.1.16. approve procedures for granting rights for professional specialists and analysts

of geology and mining sector by a professional non-governmental organization.

/This provision was added by the legislation enacted on the 1st of July, 2014/

10.1.17. approve instruction and classification of mineral resources and deposit reserves


10.1.18. approve procedures for open reporting to the public of minirel resources,

deposit reserves and exploration work results jointly with a non-governmental organiztion of

geology and mining sector which have been nationally and internationally recognized.


Article 11. The obligations of State administrative body

11.1 The State administrative body in charge of geological and mining affairs (hereinafter

referred to as “the State administrative body) shall exercise the following functions:

11.1.1 to conduct regional geological, geochemical, hydro-geological cartographic and

geophysical surveys within the territory of Mongolia;


11.1.2 to research patterns of distribution and types of occurrences of mineral resources

within the territory of Mongolia and the evaluation of such resources;


11.1.3 to provide geo-ecological research and evaluation recommendations with respect

to natural and human factors that may have an impact on the social and economic development

of Mongolia;


11.1.4 to provide persons making a request with all available geological and mining

related information, including information provided by license holders as set forth in this law,

except for information classified as confidential;


11.1.5 establish and develop database of geology and minerals;

11.1.6 exert control over plans, reports and minimum cost of exploration work of an

exploration license holder as provided in this Law.

11.1.7 receive, register and resolve applications regarding minerals reconnaissance;

11.1.8 provide evaluations and recommendations on technology and equipment used in

the mining industry and implement mining technology policy;

11.1.9 create a favorable investment environment for the mining sector and provide

evaluations with respect to the existing investment environment;

11.1.10 evaluate and conclude impact of the mining industry on the socioeconomic sector

of the country;

11.1.11 conduct research on prices of mining products and determine supply and demand

and the prospects;

11.1.12 develop and implement proposals regarding State policies on implementation of

particular projects of the mining industry;

11.1.13 organize tendering to grant a license for an area of mineral concentration

discovered by the State fund and make conclusion to allocate areas for purpose of micro mines

and common minerals;


11.1.14 exert unified control over activities related to exploration and mining licenses;

11.1.15 provide conditions to conduct activities, under public control, regarding newly

granting, reissuing, revoking, transferring and pledging exploration and mining license, returning

areas partially or wholly or transferring that area;


of July, 2009/

/This provision was amended by the legislation enacted on the 13th

of February, 2015/

11.1.16 receive, register and resolve applications requesting to participate in the selection

process for exploration and mining licenses;

/This provision was added by the legislation enacted on the 16th of July, 2009/

/This provision was amended by the legislation enacted on the 13th of February, 2015/

11.1.17 keep registration of licenses;

11.1.18 keep cartographic registration of licenses;

11.1.19 grant licenses for the exploration and mining of minerals other than common

minerals;


of July, 2009/


of January, 2014/


11.1.20 collect service fees and exploration and mining license payment other than

common minerals;


/This provision was added by the legislation enacted on the 09th of January, 2014/


11.1.21 review and resolve boundary disputes between the license holders;

11.1.22 provide interested persons with possibility to the review registration of

cartography, inform relevant organizations and notify to the public of changes to such

registration;

11.1.23. make conclusion whether selected land is restricted or prohibited to prospect,

explore or mine minerals, or taken for special purpose or into reserves, and wholly or partially

overlapped with valid licensed area by receiving a request from soum or district Governor as

provided in Clause 12.1.5 of this Law and determine volume and boundary of the land;


11.1.24. keep registration of information regarding exploration and mining license

holders who issued shares on the stock exchange;

/This provision was added by the legislation enacted on the 1st

of July, 2014/

11.1.25. determine selection area by coordinates which is available for granting minerals

exploration or mining license under this Law;


11.2 The State administrative body unit in charge of geological affairs shall be responsible for

issues set forth in Clauses 11.1.1-11.1.7, unit in charge of mining affairs shall be responsible for

issues set forth in Clauses 11.1.8-11.1.12, and unit in charge of cadastral affairs shall be

responsible for issues set forth in Clauses 11.1.13-11.1.23 of this Article.

/This provision was amended by the legislation enacted on the 01st of July, 2010/

11.3 A professional inspection agency shall perform the State control for implementation of

legislation on minerals and prospecting, exploration and mining activities.



of March, 2015/

Article 11’. The functions of the National geological institution

11’.1. The National Office of Geology shall execute following functions:

11’.1.1. conduct geological, geophysical, geochemical, hydro-geological, and geo-

ecological mapping, surveys and analysis within the territory if Mongolia;

11’1.2. conduct research on distribution patterns of mineral resources and mineragenic

research, and evaluate prospects of mineral resources within the territory of Mongolia;

11’.1.3. establish and develop a national geological minerals resources database and

provide persons with information other than those that are classified as confidential upon

request;

11’1.4. keep state unified registration of minerals, and register the movement of reserves.

/The above Article was added by the legislation enacted on the 1st of July, 2014/

Article 12. Full powers of local administrative and self-governing bodies

12.1 Local administrative and self-governing bodies shall exercise the following powers with

regard to mineral affairs:

12.1.1 organize implementation of decision made by Government concerning the

legislation on minerals and its implementation within respective territory;

12.1.2 permit exploitation of the licensed area for the purposes within its relevant

territory and terminate it in case of any violation;

12.1.3. exert control over how license holders are fulfilling their duties to protect and

rehabilitate the environment, to ensure the health protection of population, and to contribute to

the local budget;

12.1.4. make decisions on taking particular land for local special purpose in accordance

with grounds and procedures as provided by the Land Law.

12.1.5. request and have resolved by the Central administrative body to have made

conclusion as set forth Clause 11.1.23 of this Law regarding the selected land to be allocatedd for

the purpose as provided in Clause 16.1.11 of the Land Law.


Article 13. Taking areas into reserves

13.1 Areas allocated by mining and exploration licenses may be taken into reserves based on the

Government’s decision for the following purposes:

13.1.1 organize the registration of licenses;

13.1.2 resolve boundary disputes among license holders;

13.1.3 conduct geological studies, mineral prospecting and exploration activities with the

State fund;

13.2 If an area is taken into reserves in accordance with Article 13.1 of this Law, relevant

decision shall be informed to the public along with the following information:

13.2.1 the name of the province and soum where the reserve area is located;

13.2.2 the coordinates of the reserve area;

13.2.3 the purpose for reserving the area;

13.2.4 the time period the area shall be reserved.

13.3 The State administrative body shall record the reserve area in the licensing and cartographic

registration as set forth in Article 13.1 of this law.

13.4 A reserve area shall be released for the following reasons:

13.4.1 a decision by the Government to release the reserve area prior to expiration of the

term;

13.4.2 the term for which the reserve area is reserved expires;

13.4.3 after settlement of the circumstances set forth in Articles 13.1.1-13.1.3 of this

Law.

13.5 If the reserved area is released on the grounds set forth in Article 13.4 of this Law, a person

who previously held the mining and exploration licenses shall have the preemptive right to

continue hold such area.

Article 14. Special purpose territory with restrictions and prohibitions on mineral prospecting,

exploration and mining activities

14.1 In the event that a competent authority makes decision to take particular land for special

purpose, the following information shall be delivered to the State administrative body within ten

(10) business days after making decisions:

14.1.1. the names of the province and soum where the territory is located;

14.1.2. the coordinates of the land taken for special purpose;

14.1.3. the purpose for which the land was taken for special purpose;

14.1.4. the time period of the land for special purpose.

14.2 Time period of particular land for special purpose shall not be less than 5 years.

14.3 The State administrative body shall record the coordinates of the land for special purpose in

the license and cartographic registration.

14.4 If a license holder is unable to prospect, explore or mine minerals because the area that was

granted through the exploration or mining license is partially or wholly taken for a special

purpose, the organization that made the decision shall pay compensation to the license holder

within 1 year.

/This section was amended by the legislation enacted on the 1st of July, 2014/

14.5 The organization that made decision to take land for special purpose and the license holder

shall make an agreement regarding the amount of compensation and payment term as defined in

Article 14.4 of this Law. If the parties fail to reach an agreement, the amount of compensation

and the payment term shall be determined by the State administrative body based on conclusion

of an authorized independent person.

14.6 The license holder shall have the right to resume its activities if the compensation is not

paid within the time set forth in Article 14.5 of this Law.

14.7 Disputes related to the compensation specified in Article 14.5 of this Law shall be resolved

by a court.

14.8 If the time period of the land for special purpose expires, the State administrative body shall

notify the public of this. If a person who previously held a mining or exploration licenses,

submits application within 1 month of such notice, the license holder shall have the preemptive

right to obtain license.

14.9 When the person, who previously held the area based on exploration and mining licenses,

continues to hold the released area as specified in Articles 13.5 and 14.8 of this Law, license

term shall be extended by a period for which the area was taken for special purpose or into

reserves.

/This section was added by the legislation enacted on the 1st of July 2014/

CHAPTER THREE

Mineral prospecting and exploration

Article 15. Reconnaissance

15.1 A legal entity may conduct reconnaissance within the territory of Mongolia without license,

provided that the legal entity notifies the State and local administrative bodies in advance,

registers area and location of the reconnaissance and its own name and address.


of January 2009/


15.2 Disturbing the subsoil while conducting reconnaissance is prohibited and any person

proposing to conduct reconnaissance shall obtain permission to enter the land from the

landowners, land users or land-users.

Article 16. Geological survey and research work to be conducted by State fund

16.1 State funded geological survey and research work shall be conducted without a license.

16.2 Geological surveys the purpose of which is to identify geological pattern, mineral

distribution, and prospective areas of mineral concentration shall be conducted using scientific

methods and methodologies according to a certain schedule.

16.3 Conducting prospecting of minerals shall be executed in comprehensive manner with State

budget funding.

16.4 Information regarding state-funded geological surveys is the main components of the State

information database and it shall be accessible to the public.

16.5 State funded research work and geological survey may be conducted in special purpose

territory and no fee shall be paid.

16.6 The State administrative central agency in charge of geological and mining affairs shall

approve procedures for financing, implementing, monitoring, and receiving results of State

funded geological survey as set forth in this law.

Article 17. Allotment of a selection area for granting exploration license

17.1. The state administrative organization when determining the area coordinates as provided by

Article 11.1.25 of this Law shall notify in writing Governors of relevant aimags or the Capital

City and shall attach the area map to the notifications.

17.2. Within fourty five (45) days of receiving the notice set forth in Article 17.1 the Governor of

the aimag or the Capital City shall obtain conclusion of the Citizens Representatives Hural of the

soum or district or the Presidium of Citizens Representatives Hural of the aimag or the Capital

City and shall respond to the state administrative organization. Failure to respond within the

timeframe shall be deemed as consent.

17.3. The coordinates of the area for granting exploration license shall be approved by the

Cabinet based on consenting conclusion obtained as provided by Article 17.2 of this Law and the

conclusion of the state central administrative organization in charge of geology and mining.

17.4. The state administrative organization shall allot the area for granting exploration license

within the coordinates approved by the Cabinet under Article 17.3 of this Law and shall

announce to the public the date for receiving requests to participate in the selection process

through daily newspapers, no less than 30 days prior organizing the selection.

17.5. The area allotted as provided by Article 17.4 of this Law shall meet following

requirements:

17.5.1 It shall be quadrangle in shape and it shall be bordered by straight lines

overlapping with directions along longitude and latitude;

17.5.2 No part of the requested exploration area shall overlap with a special purpose

territory or an area where mining and exploration activities are prohibited, or with an area

appropriated for reserve;

17.5.3 No part of the requested exploration area shall overlap with an area where an

effective license is issued.

17.6. In order to avoid overlapping of licensed areas as set forth in Clauses 17.5.2 and 17.5.3 of

this Law, the sections of the requested area bordering with following territory and area may not

be straight lines:

17.6.1 national borders;

17.6.2 a reserved area;

17.6.3 a special purpose territory or an area where mining and exploitation activities are

prohibited;

17.6.4 a license is granted before this Law became effective and the area has a shape and

position other than as provided under this Law;

17.6.5 lakes, ponds, and other natural formations that are impossible to include in the

exploration area.

17.7. The size of an exploration area to be granted per one (1) license shall not be less than

twenty-five (25) hectares and be more than one hundred fifty thousand (150 000) hectares.

Article 18. Rules regarding submission of request to participate in selection for granting

exploration license and registration of such submissions.

18.1. Legal entity provided by Article 7.1 of this Law shall submit request to participate in

selection for granting exploration license to the state administrative organization under the rules

described in Article 10.1.2 of this Law and shall attach following documents:

18.1.1 the applicant’s name, postal address, phone and fax numbers and e-mail address;

18.1.2 a certified copy of the applicant’s State registration certificate /the authorized

organization receiving this certified copy shall make an assessment of the authenticity of the

copy by comparing it to the original one free of charge/, if it is mailed, it must be verified by a

notary;

18.1.3 a document showing that the service fee set forth in Clause 10.1.4 of this Law has

been paid;

18.1.4 information that it has sufficient professional staff, equipment and machinery,

technical proposal that consolidates type, scope, time period and cost of exploration works to be

performed on the allotted site, projected cost and budget to be spent for environment protection

and other documents;

18.1.5 sealed financial proposal written according to the form appoved by the state

administrative organization;

18.1.6 certification from the tax authority that the entity is registered as taxpayer in

Mongolia;

18.1.7 other required documents as provided by the rules described in Article 10.1.2 of

this Law;

18.2. Upon receipt of the request provided by Article 18.1 of this Law the state administrative

organization shall carry out following actions:

18.2.1 to register request in the registration ledger, to make notes on each page of the

attached documents that shows year, month, day, hour and minute and registration number, and

to issue a certification regarding such registration to the entity who has submitted the request;

18.2.2 there shall be special note made to the first and last request submitted on the same

day;

Article 20. Organization of selection to grant exploration license and issuance of license

20.1. The state administrative organization shall organize the selection to grant exploration

license according to the rules provided by Article 10.1.2 of this Law and shall carry out any one

of the following actions:

20.1.1 according to the rules provided by Article 10.1.2 of this Law, to evaluate technical

and financial proposal of the legal entity who has submitted the request and to inform the

participant who has the highest score that it is possible to issue the license;

20.1.2 if 2 or more participants had equal scores, then to inform the participant who has

submitted first its request that it is possible to issue the license;

20.1.3 in case when the request and attached documents do not meet the requirements

provided by Article 18.1 of this Law, to inform in writing the legal entity that it is not possible

for the entity to participate in the selection and to state relevant reasons and grounds and to

return the attached documents to the request.

20.2. If a selection has been announced as provided by Article 20.1 of this Law and no request is

submitted, then the selection may be announced again.

20.3. The legal entity that has been selected through the selection process shall be notified in

writing regarding the possibility to issue exploration license as provided by Articles 20.1.1 and

20.1.2 together with notice that the first year license fee shall be paid within the time period

provided by Article 34.1 of this Law.

20.4. If within the time period provided by Article 34.1 of this Law commencing from the date of

delivering the notice described in Article 20.3 of this Law, a notification has been made that the

license is not possible to be obtained or the first year payment has not been paid, then the state

administrative organization shall invalidate the notices provided by Articles 20.1.1 and 20.1.2 of

this Law and shall notify in writing the legal entity that has submitted the request.

20.5. If the legal entity that has been selected through the selection process has paid the first year

payment within the time period provided by Article 34.1 of this Law, the state administrative

organization shall issue, within 3 business days, the exploration license for the period of 3 years

and shall register license and allotted area in the registry of licenses and related cartography.

20.6. There shall be notifications made in the license regarding year, month and day of the

issuing the license, name of the license holder and corner point coordinates of the allotted area

and license shall have an attachment for making notice regarding changes related to the license.

20.7. Upon issuing the exploration license the state administrative organization shall notify the

state central administrative organization in charge of environmental matters, Governors of the

aimags, soums and districts where the area is located and the professional inspection agency.

Article 21. Rights of exploration license holder

21.1 An exploration license holder shall have the following rights:

21.1.1 to conduct prospecting and exploration of minerals within the boundaries of the

exploration area as set forth in this law;


of July 2009/


of February 2015/

21.1.2.хайгуулын талбайн хилийн дотор цацраг идэвхт ашигт малтмалыг цөмийн

энергийн асуудал эрхэлсэн төрийн захиргааны байгууллагаас олгосон тусгай зөвшөөрлийн

үндсэн дээр эрэх, хайх;


of July 2009/

/This provision was considered as annulled by the legislation enacted on the 13th

of February,

2015/

21.1.3 to obtain a mining license under its exclusive right for any part of the exploration

area upon fulfilling the terms and conditions of this law;

/This provision was added and numbering was changed by the legislation enacted on the 16th

of

July 2009/


of February 2015/

21.1.4 to transfer the exploration license, or return all or part of the exploration area with

permission of and under supervision of an authorized organization upon fulfilling the terms and

conditions of this law;


of

July 2009/


of February 2015/

21.1.5 to extend the term of the exploration license for minerals other than radioactive

minerals three times for three years each upon fulfilling the terms and conditions of this law


of

July 2009/

/This provision was amended by the legislation enacted on the 01St

of July 2014/

21.1.6 to access the exploration area to conduct exploration work and construct necessary

temporary structures


of

July 2009/

21.1.7 to pass through the land surrounding the exploration area for the purpose of

entering the exploration area;


of

July 2009/

21.1.8 to enter or pass through the land owned or possessed by the other person with the

landowner’s or land possessor’s permission in order to exercise the rights provided by this law.


of

July 2009/

Article 22. Extension of the term of an exploration license

22.1 One (1) month prior to the expiration of an exploration license, the license holder may apply

for an extension of the license by submitting an application to the State administrative body

along with the following documents attached to the application:

22.1.1 a certified copy of the exploration license /the authorized organization receiving

this certified copy shall make an assessment of the authenticity of the copy by comparing it to

the original one free of charge/, if it is mailed, it must be verified by a notary;

/This provision was re-edited by the legislation enacted on the 10th

of February 2011/

22.1.2 receipts for payments of annual license fees and service fees and a document

proving that the exploration work conducted is no less than the minimum cost of exploration;

22.1.3 document proving the environmental protection plan was approved re-newly as set

forth in the Article 40 of this law;


of May 2012/

22.1.4 a report on completion of the current stage of exploration work and a document on

its acceptance.

22.2 Within ten (10) business days of receiving the application for extension set forth in the

Article 22.1 of this law, the State administrative body shall review the license holder’s

compliance with the conditions and requirements of Articles 7.2 and 31. If there are no

violations, the license term shall be extended for the period set forth in the Clause 21.1.5 of this

law and be recorded in the license registration book.


of July 2009/

22.3 Immediately following the extension of an exploration license, the State administrative

body shall notify the agency for specialized inspection and publish about it in a daily newspaper.

22.4 The State administrative body shall refuse the extension of a license if the license holder

fails to meet the requirements of Articles 7.2 and 31 of this law, notify the applicant in writing,

and record it in the license registration book.

Article 23. Pre-mining operation

23.1 Pre-mining operation is the period after exploration is completed and the mineral deposit

reserve is registered with State registration office where the design package, feasibility study,

mine development and commencement of production occurs.

23.2 The commencement period for the mining of the mineral deposit or mine development

period shall be no more than 3 years after expiration of the exploration license.

23.3 Pre-mining operations shall be regulated by a pre-mining agreement concluded between the

exploration license holder and the State administrative agency.

23.4 The license holder shall pay exploration license fees for the seventh to ninth years of the

term as set forth in Article 32.2 of this law and within the period set forth in Article 23.2 of this

law.

/This provision was considered as revoked by the legislation enacted on the 01st of July 2014/

CHAPTER FOUR

MINERALS MINING

Article 24. Requirements for obtaining a mining license

24.1 Only the holder of an exploration license is entitled to apply for a mining license for the

area subject to the exploration license.

24.2. In case other than as provided by Article 24.1 of this Law, the rules provided by Articles 18

and 20.1 of this Law shall be equally applied when mining license is to be issued.

24.3 The application for a mining license set forth in the Articles 24.1 shall contain a

standardized map issued by the state administrative body with the location and coordinates of the

area to be explored marked on it. The coordinates shall specify the degrees, minutes, and seconds

of the location.

24.4 The requested mining area shall meet the following requirements:

24.4.1 shall have the shape of a polygon with borders that are straight lines and are not less than

500 meters in length;

24.4.2 shall not overlap with a reserve area, special purpose territory, an area under existing valid

license, or an area where mining and exploration activities are prohibited or restricted;


of July 2009/

24.4.3 in the case of salt and common mineral deposits, each side of the area shall be not less

than 100 meters.


of July 2009/

24.5 In order to avoid overlapping of licensed areas as set forth in Clause 24.4.2 of this law, the

borders of the mine area may deviate from straight lines if the area borders with the following::

24.5.1 national border;

24.5.2 reserve area;

24.5.3 special purpose territory, an area where mining and exploitation activities are

prohibited;


of July 2009/

24.5.4 an exploration or mining license area granted before this law became effective or

an area that has a shape and position other than as provided under this law;

24.5.5 lakes, ponds, and other natural formations that are impossible to include in the

exploration area.

Article 25. Procedure for submitting application requesting mining license

25.1. An application for a mining license defined in the Articles 24.1 of this Law shall be

submitted to the State administrative in accordance with the authorized template along with the

following documents:

25.1.1. the applicant’s name, mailing and e-mail addresses, phone and fax numbers, and a

reference containing the name of its officer authorized to make decisions;


25.1.2. a document certifying that the applicant meets the requirements of the Article 7.1

of this law;

25.1.3. area map prepared that complies with the requirements of the Article 24.3 of this

law and the names of the province, soum, and district where the mining area is located;

25.1.4. a document showing that the applicant has paid the service fee set forth in the

Clause 10.1.4;

25.1.5. the Mineral resources council’s notes and a decision of the State administrative

body on acceptance of the exploration work results;

25.1.6. a document verifying its performance of the duties under environment

management plan during the exploration work;


of May 2012/

25.1.7. an evaluation of the effect on the environment;

25.1.8. a decision by the officer or organization that conducted the tender as set forth in

the Article 24.2 of this law for the areas explored with State fund.

Article 26. Registering and processing the application

26.1. Upon receiving the application set forth in the Article 25.1 of this law the State

administrative body shall carry out the following:

26.1.1 register the application in the application registration, record the registration

number, date, hour and minute of registration on each page of the attached documents and issue a

receipt to the applicant acknowledging the registration of the application;

26.1.2 immediately following the registration, it shall be conducted by preliminary

screening whether the application and the attached documents meet the requirements set forth in

the Articles 24.3, 24.4 and 25.1 of this law.

26.2 Following the preliminary screening set forth in the Clause 26.1.2 of this law, the State

administrative body shall clarify the following:

26.2.1. if a holder of an exploration license applies for a mining license, whether the

mining area requested by the holder of the exploration license is within the boundaries of its

exploration licensed area.

26.2.2 whether the requested mining area overlaps with any reserve area, special purpose

territory, an area where mining and exploration activities are prohibited, or an area already

subject to a valid license;


of July 2009/

26.2.3. whether an amount and evaluation of the mineral deposit determined by

exploration is sufficient to rehabilitate the environmental damages that may result from

extraction activities.

26.3. Within twenty (20) business days and following the registration of an application, the State

administrative body shall make one of the following decisions after completing the actions set

forth in the Articles 26.1 and 26.2 and notify the applicant:

26.3.1. refuse the request and give written notice containing the grounds of such decision

to the applicant if the application and attached documents fail to meet the requirements of the

Articles 24.3, 24.4 and 25.1 of this law and record it in the application registration book.

26.3.2 grant the mining license according to the exclusive rights of the applicant who

holds an exploration license and ensure that the first year’s license fee set forth in the Article

34.1 of this law is paid;

26.3.3 grant the mining license if the requested area does not overlap with any part of an

area with restrictions or prohibitions on prospecting, exploration or mining activities, a reserve

area, special purpose territory, or any area subject to a valid license and ensure that the first

year’s license fee set forth in the Article 34.1 of this law is paid;

26.3.4 if the requested area overlaps with any part of the area set forth in the Clause

26.3.3 of this law, the application for the mining license shall be refused and written notice

containing grounds of such refusal shall be issued to the applicant. This shall be recorded in the

application registration book.

26.4 If the applicant that receives an approval for granting license as set forth in the Clauses

26.3.2 and 26.3.3 of this law fails to pay the first year's license fee within the period set forth in

the Article 34.1 of this law, the State administrative body shall remove the application from the

application registration, notify the applicant in writing and record it in the application registration

book.

26.5. Within 3 business days following the payment of the first year license fee is made by

applicant as set forth in Articles 26.3.2 and 26.3.3 of this law, the State administrative Body shall

issue a mining license to the applicant for a term of thirty (30) years and shall register the license

and mining area in the license and cartographic registries.

26.6. A mining license shall contain the date of issuance, license holder's name, address and the

coordinates of the corners of the mine area covered by the license and an attachment in which all

subsequent changes with respect to the license shall be recorded.

26.7. Within 7 business days following the issuance of a mining license or a license for using a

derivative deposit, the State administrative body shall notify the State administrative body in

charge of the environmental affairs, the State administrative body in charge of tax affairs, the

Governors of the province, soum and district where the licensed area is located, and agency for

specialized inspection and announce it in a daily newspaper.


of July 2016/

26.8. The State administrative body shall return the application and attached documents to the

applicant if the decisions set forth in the Clauses 26.3.1, 26.3.4 and 26.4 of this law are made.

26.9. If the reserve is determined through an exploration funded by the State, a mining license

for that area shall be granted through a tender.

26.10. If a holder of a mining license allows to use the derivative deposit by a third party, the

license holder and the third party shall enter into a contract regarding such use and notify the

State administrative body in charge of geological and mining affairs of the contract within 14

days of making it.


of November, 2016/

26.11. The State administrative body in charge of geological and mining affairs shall grant a

license for using derivative deposit for the period of three years on the basis of the Mineral

resources council’s conclusion and decision regarding the contract set forth in the Article 26.10

of this Law and the feasibility study for using derivative deposit.


of November, 2016/

Article 27. Rights and obligations of mining license holders

27.1 A mining license holder shall have the following rights and obligations:

27.1.1. use the minerals that exist within the mining claim in compliance with the

conditions and requirements set forth in this law


of July 2009/


of February 2015/

27.1.2..use the minerals other than the radioactive minerals that exist within the mining

claim in compliance with the requirements and regulations set forth in this law


of July 2009/

/This provision was considered as annulled by the legislation enacted on the 13th

of February,

2015/

27.1.3. to fulfill obligations set forth in Chapter 6 of this law;


of July 2009/

27.1.4. the legal entity that holds the mining license and the right to export shall sell the

minerals and other products it produces at the international market price;


of

July 2009/

/This provision was amended by the legislation enacted on the 1st of July 2014/


of February 2015/

27.1.5. to conduct exploration for minerals within the mining area;


of

July 2009/


of February 2015/

27.1.6. to transfer the mining license or return the mining area wholly or partly upon

fulfilling the conditions and requirements as set forth in this law;


of

July 2009/


of February 2015/

27.1.7 to extend the term of the mining license for minerals other than radioactive

minerals for a period of twenty (20) years each depending on the amount of the minerals;


of

July 2009/

27.1.8 to enter and pass through the mining area, construct and use the necessary

structures for the purpose of carrying out mining activities;


of July 2009/

27.1.9 to pass through the land surrounding of the mining area;


of July 2009/

27.1.10 to enter and pass through the land owned or possessed by other persons with the

permission of the owner or possessor of the land in order to exercise the rights provided by this

law;


of July 2009/

27.1.11 to use land and water in compliance with the relevant laws.


of July 2009/

27.1.12. to include detailed information regarding the transportation of mineral products,

the organization of the infrastructure, and the fund that is required for the rehabilitation and

closure of mines in the feasibility study set forth in the Clause 48.6.1 of this law;


27.1.13. to hire an employee in charge of constantly report information related to the

environment, rehabilitation, and closure of mining to the State administrative body in charge of

geological and mining affairs;


Article 28. Extension of the term of a mining license

28.1. Not less than 2 years prior to the expiration of a mining license, the license holder may

submit an application to extend the mining license on the form approved by the State

administrative body along with the following documents:

28.1.1. certified copy of the mining license /the authorized organization receiving this

certified copy shall make an assessment of the authenticity of the copy by comparing it to the

original one free of charge/, if it is mailed, it must be verified by a notary;


of February 2011/

28.1.2. receipts for payments of license and service fees;

28.1.3. document evidencing the inspection of the implementation of the environment

protection plan as set forth in the Article 39 of this law.

28.2. Within 15 business days of receiving the application set forth in the Article 28.1 of this

law, the State administrative body shall review whether the license holder is eligible to maintain

the license. If there are no violations, the license term shall be extended for the period set forth in

the Clause 27.1.7 of this law and the extension shall be recorded in the license registration book

and the applicant shall be notified.


of July 2009/

28.3. Within 7 business days following the decision to extend the mining license, the State

administrative body shall notify the organizations set forth in the Article 26.7 of this law and

announce it in a daily newspaper.

29 дүгээр зүйл. Хөрөнгө оруулалтын гэрээ

29.1.Үйл ажиллагааныхаа эхний 5 жилд Монгол Улсын нутаг дэвсгэрт 50 саяас

дээш америк доллартой тэнцэх хэмжээний хөрөнгө оруулалт хийх ашиглалтын тусгай

зөвшөөрөл эзэмшигч өөрөө хүсэлт гаргавал үйл ажиллагаа явуулах нөхцөлийг нь

тодорхой хугацаанд тогтвортой байлгах зорилгоор түүнтэй хөрөнгө оруулалтын гэрээ

байгуулж болох бөгөөд түүнд дараахь зүйлийг тусгана:

29.1.1.татварын орчинг тогтвортой байлгах;

29.1.2.тусгай зөвшөөрөл эзэмшигч үйлдвэрлэсэн бүтээгдэхүүнээ олон улсын

зах зээлийн үнээр борлуулах;

29.1.3.олсон орлогоо захиран зарцуулах эрхийг нь баталгаажуулах;

29.1.4.хөрөнгө оруулалтын хэмжээ, хугацаа;

29.1.5.ашигт малтмалыг хүн амын эрүүл мэнд, байгаль орчинд хохирол

багатай олборлох;

29.1.6.байгаль орчныг хамгаалах, нөхөн сэргээх;

29.1.7.бусад төрлийн үйлдвэрлэл, үйл ажиллагаанд сөрөг нөлөө үзүүлэхгүй

байх;

29.1.8.бүс нутгийг хөгжүүлэх, ажлын байр шинээр бий болгох;

29.1.9. учирсан хохирлыг нөхөн төлөх.

29.2. Энэ хуулийн 29.1-д заасан гэрээг Монгол Улсын Засгийн газрын эрх

олгосноор санхүү, геологи, уул уурхайн болон байгаль орчны асуудал эрхэлсэн Засгийн

газрын гишүүд хамтран хөрөнгө оруулагчтай байгуулна.

29.3.Эхний 5 жилийн хөрөнгө оруулалтын хэмжээ 50 саяас дээш америк доллартой

тэнцэх бол 10, 100 саяас дээш америк доллартой тэнцэх бол 15, 300 саяас дээш америк

доллартой тэнцэх бол 30 жилийн хугацаагаар энэ хуулийн 29.1-д заасан гэрээ байгуулна.

29.4.Хөрөнгө оруулалтын хэмжээ 50.0 сая америк доллароос 100.0 сая америк

доллар бол Засгийн газар, 100.0 сая америк доллароос дээш бол Улсын Их Хурал тус тус

хэлэлцэнэ.

/This provision was considered as annulled by the legislation enacted on the 03rd

of October

2013/

30 дугаар зүйл. Хөрөнгө оруулагчтай гэрээ байгуулах

30.1.Хөрөнгө оруулагч нь энэ хуулийн 29.1-д заасан гэрээ байгуулах тухай

хүсэлт, гэрээний төслийг энэ хуулийн 29.2-т дурдсан төрийн захиргааны төв

байгууллагуудад ирүүлэх бөгөөд түүнд дараахь баримт бичгийг хавсаргана:

30.1.1.эхний 5 жилд оруулах хөрөнгийн хэмжээ, хугацаа, үйлдвэрийн

хүчин чадал, бүтээгдэхүүний нэр төрөл, орд ашиглах арга, технологийн талаархи

мэдээлэл, техник, эдийн засгийн үндэслэл;

30.1.2.тухайн ордын нөөцийг улсын нөөцийн нэгдсэн бүртгэлд бүртгэсэн

тухай Эрдэс баялгийн мэргэжлийн зөвлөлийн тэмдэглэл.

30.2.Энэ хуулийн 30.1-д заасан төрийн захиргааны төв байгууллагууд нь хөрөнгө

оруулагчийн хүсэлт, гэрээний төсөл, хавсаргасан баримт бичиг нь энэ хуулийн 29.3, 30.1-д

заасан шаардлага хангасан эсэхийг хянаж ажлын 10 өдөрт багтаан хүсэлт гаргасан

этгээдэд мэдэгдэнэ.

30.3.Энэ хуулийн 30.1-д заасан төрийн захиргааны төв байгууллагууд хөрөнгө

оруулагчийн хүсэлт, гэрээний төсөл, хавсаргасан баримт бичгийг хүлээн авснаас хойш 3

сарын дотор хянах бөгөөд шаардлагатай тохиолдолд зохих байгууллага, мэргэжилтний

санал, дүгнэлтийг үндэслэн дахин 3 сар хүртэлх хугацаагаар нэмэлт тодруулга

хийсний үндсэн дээр энэ хуулийн 29.1-д заасны дагуу хөрөнгө оруулагчтай гэрээ

байгуулна.

30.4.Энэ хуулийн 30.3-т заасны дагуу хөрөнгө оруулалтын гэрээнд гарын үсэг

зурсны дараа уг гэрээний нөхцөлийн тухай мэдэгдлийг Монголбанк болон холбогдох

бусад байгууллагад хүргүүлнэ.

/This provision was considered as annulled by the legislation enacted on the 03rd

of October

2013/

CHAPTER FIVE

CONDITIONS FOR MAINTAINING ELIGIBILITY TO HOLD A LICENSE

Article 31. Maintaining the eligibility to hold a license

31.1. A license holder is obliged to comply with the conditions and requirements set forth in the

Articles 32 and 33 of this law and failure to comply shall result in revocation of the license

pursuant to the Article 56 of this law.

Article 32. License fees

32.1. The license holder shall pay license fees annually in accordance with this law.

32.2. The exploration license fee shall be 145 tugrugs per hectare of exploration area for the first

year, 290 tugrugs for the second year, 435 tugrugs for the third year, 1,450 tugrugs for each of

the fourth to sixth years, 2175 tugrugs for each of the seventh to ninths years, and 7250 tugrugs

for each of the tenth to twelfth years.

/This section was added by the legislation enacted on the 01st of July, 2014/

/This section was amended by the legislation enacted on the 23rd

of January, 2015/

32.3. 32.3. The fee for a mining license shall be 21,750 tugrugs per hectare of the mining area,

and the fee for mining limestone, coal, and minerals intended for national industrial purpose shall

be 7,250 tugrugs per hectare.

/This section was re-edited by the legislation enacted on the 09th

of January, 2014/

/This section was amended by the legislation enacted on the 23rd

of January, 2015/

Article 33. The minimum cost of exploration and its verification

33.1. The holder of an exploration license shall conduct annual exploration activities on each

hectare of the exploration area that cost no less than the following:

33.1.1. US$ 0.5 for each of the second and third years of the license term;

33.1.2. US$ 1.00 for each of the fourth to sixth years of the license term;

33.1.3. US$ 1.50 for each of the seventh to ninth years of the license term;

33.1.4. US$ 10 for each of the tenth to twelfth years of the license term.


33.2. The State administrative body shall verify the exploration license holder’s exploration

expenditure on the basis of the license holder’s annual report on the exploration work and the

financial balance sheet.

33.3. If necessary, the State administrative body shall conduct worksite inspections to verify

actual exploration expenditures.

Article 34. Payment of license fees

34.1. A holder of the exploration and mining license shall pay the license fees for the first year

within 10 business days after the receiving of the notices set forth in the Clauses 20.3, 26.3.2 and

26.3.3 of this law.

34.2. License fees for the subsequent years shall be paid annually in advance of the anniversary

date of the issuance of the license.

34.3. The amount of the license fee shall be calculated on the basis of the measurements of the

license area registered in the license registration at the time of making such license fee, and the

amount of the fee shall not change for that year.

34.4. The date of the license fee payment shall be deemed the date of the bank transaction, and

the payment shall be deemed complete once the State administrative body receives the relevant

receipt.

34.5. Mongolbank’s official rate for that day shall be applied to the payment of the expenses

made in US dollars.

/This section was re-edited by the legislation enacted on the 23rd

of January, 2015/

34.6. If the payment is not paid within the timeframe indicated in the Article 34.2 of this law, a

penalty fee of 0.3 percent of that year’s fee of such delay shall be imposed.


34.7. The period for delay indicated in the Article 34.6 of this law may be exceeded by not more

than 30 days, and if it exceeds by more than that, the license shall be revoked pursuant to the

Article 56 of this law.


CHAPTER SIX

OBLIGATIONS OF A LICENSE HOLDER

Article 35. General obligations of a license holder

35.1. While conducting the prospecting, exploration and mining activities, a license holder shall

comply with the general obligations set forth in this Article. Failure to comply with the Article

shall subject the license holder to to the penalties set forth in the Clause 66.1.4 of this law. 35.2.

An exploration license holder shall keep the following documents at the exploration site:

35.2.1. a copy of the exploration license;


of February, 2011/

35.2.2 an environment management plan and report;


of May, 2012/

35.2.3 an exploration work plan reviewed by the State administrative body and agency

for specialized inspection.

35.3. A mining license holder shall keep the following documents at the mine:

35.3.1. a copy of the mining license;


of February, 2011/

35.3.2. a feasibility study on mineral mining and a mining work plan reviewed by the

relevant organization;

35.3.3. an environmental impact assessment;

35.3.4. an environment management plan;


of May, 2012/

35.3.5. a property leases and product sales agreements;

35.3.6. a records of establishing and maintaining the borders of the mining area;

35.3.7. a land and water use agreements.

35.4 A mining license holder shall commission the mining activities after it has been accepted by

a commission appointed by the State central administrative agency in charge of geological and

mining affairs.

35.5 The mining license holder shall utilize the mineral reserves completely. It is prohibited for

the license holder to selectively mine in order to make profit.

35.6. The holder of a mining license and the miner who extracts a gold from a micro mine shall

submit all of the gold they extracted by the end of the fiscal year.


of January, 2014/

35.7. If a license holder discovers methane gas while extracting coal, they shall notify the State

administrative body in charge of oil.


35.8. if a license holder intends to use the methane gas described in the Article 35.7 of this law,

they may do so in compliance with the Law on Oil.


35.9. If a license holder requires goods, works, services, subcontractor which are required for

their operation and they shall give preemptive right to the legal entities that are registered in

Mongolia as taxpayers and have goods, works and services that are meet the relevant standards.


35.10. If the mining enrichment and formation activities of a license holder are terminated due to

sudden technical accidents, delays, force majeure, court decisions, and the acts of the state

inspector among other reasons, the holder shall notify the State administrative body in charge of

geological and mining affairs of that termination.


35.11. When selling products that are extracted, enriched, or semi-processed, priority shall be

given to processing factories that are operating within the territories of Mongolia. The products

shall be sold at the market price.


35.12. If the address, email address, phone and fax numbers of a license holder are changed, the

holder must notify the State administrative body.


Article 36. Establishing the boundaries and marking the area held under a mining license

36.1. Within three (3) months following the registration of the mining license in the license

registration in accordance with the Article 26.5 of this Law, the mining license holder shall

establish the boundaries and mark the approved mining area by permanent markers pursuant to

technical requirements specified by the agency for specialized inspection. The establishment of

the boundaries shall be performed by an entity authorized by the State administrative body, who

shall provide the act on determination of boundaries to the agency..

36.2. A mining license holder shall preserve the markers and adjust or replace them if the State

administrative body decides to change the borders of the area.

Article 37. Environmental protection

37.1. License holders shall fulfill an obligations specified the laws and legislations on

environmental protection and the Articles 38 and 39 of this law.

37.2. A license holder is prohibited to conduct prospecting and exploration operations without

written approval from relevant environmental agency or commence mining operations without a

commission act set forth in the Article 35.4 of this law. In case of a dispute arising out of

regarding these matters, the complaint may be lodged with the agency for specialized inspection.

Article 38. Environmental protection obligations of an exploration license holder

38.1. An exploration license holder shall have the following obligations regarding environmental

protection:

38.1.1 Within 30 days of obtaining a license, the license holder shall prepare an

environmental protection plan by consulting with the environmental inspection agency and

Governor of the soum or district where the exploration area is located;

38.1.2 The environmental protection plan as defined in the Clause 38.1.1 of this Law

shall include measures to ensure the level of the environment pollution does not exceed the

accepted limits and to rehabilitate the area by means of backfilling, leveling and cultivation to

allow for future public use;

38.1.3 The environmental protection plan set forth in the Clause 38.1.1 of this Law shall

be delivered to and be approved by the Governor of the soum or district where the exploration

area is located.

38.1.4 Upon approval of the environmental protection plan as set forth in the Clause

38.1.3 of this law, a copy of this plan shall be delivered to the local environmental inspection

agency;


of May, 2012/

38.1.5 The license holder shall record all instances of adverse environmental impact

resulting from the exploration activity in its annual environmental management report and

deliver it to the Governor of the relevant soum or district and the environmental inspection

agency;


of May, 2012/

38.1.6 The report set forth in the Clause 38.1.5 shall contain information on measures

taken to protect the environment, new technology used for the exploration work and proposed

amendments to the environmental protection plan directed at preventing the possible impact on

the environment and shall be approved by the Governor of the relevant soum or district;

38.1.7 To provide the State and local administrative agency official in charge of

monitoring implementation of the laws on environmental protection with an opportunity to enter

the exploration area to conduct monitoring activities on the site;

38.1.8 To ensure the fulfillment of his/her responsibilities with respect to environmental

protection, an exploration license holder shall deposit funds equal to 50% of his/her

environmental protection budget for that particular year in a special bank account established by

the Governor of the relevant soum or district.

38.2. Within 10 days of receiving the plan and its proposed amendments defined in the Clauses

38.1.3 and 38.1.6 of this law, the Governor of soum or district shall review and approve the plan

and deliver it to the license holder.

38.3 If a license holder fails to fully implement the measures provided in the environmental

management plan, the Governor of the relevant soum or district shall use the deposit set forth in

the Clause 38.1.8 of this law to implement these measures, and the license holder shall provide

any additional funds required without dispute.


of May, 2012/

38.4 If the license holder performs the obligations of the environmental management plan fully,

the deposited funds set forth in the Clause 38.1.8 of this law shall be returned to the license

holder.


of May, 2012/

Article 39. Environmental protection obligations of mining license holders

39.1 A mining license holder shall have the following obligations with regard to environmental

protection:

39.1.1 a person defined in the Article 24.1 of this law shall an environmental impact

assessment and an environmental management plan before obtaining a mining license, and a

person that obtains the mining license through a tender shall prepare an environmental impact

assessment and an environmental management plan after the obtaining such license;


of May, 2012/

39.1.2 the environmental impact assessment shall identify the possible adverse impacts of

the mining activities on the environment and health of population and shall include preventive

measures that avoid and minimize such adverse impacts;

39.1.3. the environmental management plan shall contain measures to ensure that mining

operations are conducted in the least damaging way to the environment and identify preventive

measures to protect air, water, humans, animals, and plants from the adverse effects of mining

operations;


of May, 2012/

39.1.4. apart from the provisions set forth in the Clause 39.1.3 of this law, the

environmental protection plan shall also include the following:


of May, 2012/

39.1.4.1. storing and controlling toxic and potentially toxic substances and

materials;

39.1.4.2. protecting, utilizing, and conserving the surface and underground water;

39.1.4.3. constructing tailing dams and ensuring the mine area safety;

39.1.4.4. rehabilitating measures set forth in Article 38.1.2 of this law;

35.1.4.5. other measures as may be appropriate for the particular type of a mining

operation.

39.1.5. The environmental impact assessment and environmental protection plan set forth

in the Clause 39.1.1 of this law shall be submitted to the State central administrative body in

charge of the environmental affairs.


of May, 2012/

39.1.6. Immediately following the approval of the environmental impact assessment and

environmental management plan, the license holder shall deliver a copy of the documents to the

Governor of the province, soum or district and local environmental inspection agency of the area

where the mineral deposit is located.


of May, 2012/

39.1.7. Mining license holders shall record all instances of adverse environmental impact

resulting from mining activity, prepare and send a copy of its annual reports on the

implementation of the environment management plan to the State central administrative body in

charge of environmental affairs, the Governor of relevant province, soum or district, and the

professional inspection agency. The report shall contain the following:


of May, 2012/

39.1.7.1. measures taken to protect the environment

39.1.7.2. new machinery and technology that is utilized

39.1.7.3. proposed amendments to the environmental impact assessment and

environmental management plan with regard to possible adverse impacts on environment due to

expansion of mining operations.


of May, 2012/

39.1.8. A mining license holder shall provide officials of local and State administrative

bodies in charge of monitoring implementation of legislation on environmental protection with

an opportunity to enter the mining area and conduct inspection activities on the site.

39.1.9. Regulate in compliance with the Clause 9.8 of the Article 9 of the law on

environmental impact assessment


of May, 2012/

39.2. Within 30 days of receiving the documents set forth in the Clauses 39.1.5 and 39.1.7.3 of

this law, the State central administrative body in charge of the environmental affairs shall review

and approve the documents and notify the license holder of its decision.

39.3. If a mining license holder fails to fully implement the measures of environmental

rehabilitation, the State central administrative body in charge of the environmental affairs shall

order a specialized organization to implement rehabilitation work with the deposited funds set

forth in the Clause 39.1.9 of this law, and the license holder shall provide any additional funds

required without dispute.

39.4. If the license holder fulfills all the obligations of the environmental impact assessment and

environmental management plan, the deposited funds set forth in the Clause 38.1.9 of this law

shall be returned to the license holder during the closure of the mine.


of May, 2012/


of May, 2012/

39.5. The funds set forth in the Article 39.3 shall be transferred before the extraction activities of

that year commence, and the State administrative body in charge of the environmental affairs

shall notify the Governor of the relevant soum and district of such transfer.

39.6. If license holder fails to transfer the deposited funds set forth in the Clause 39.1.9 of this

law within the period required by the Article 39.5 of this law, the Governor of the soum or

district shall have the right to halt extraction activities for the year.

39.7. In case of failure to complete rehabilitation activities of that year, the Governor of the

relevant soum or district or the agency for specialized inspection have the right to halt the

commencement of extraction activities for the following year.

39.8. The procedures of monitoring the transactions of special accounts set forth in the Clauses

38.1.8 and 39.1.9 of this law shall be approved by the member of the Cabinet who is in charge of

the environmental affairs.

39.9. The State central administrative body in charge of the environmental affairs shall require

the license holder to make amendments to the environmental management plan and

environmental impact assessment if new circumstances that have adverse impacts on

environment arise due to introduction of new equipment and technology during the valid license

term.


of May, 2012/

Article 40. Review of environmental protection plan in connection with extensions of licenses

/The title of this section was re-edited by the legislation enacted on the 17th

of May, 2012/

40.1. Exploration license holders applying for a license extension shall submit their revised

environmental management plan to the Governor of the relevant soum or district for approval

prior to the expiration of the exploration license.


of May, 2012/

40.2. Mining license holders applying for a license extension shall submit their revised

environmental impact assessment and environmental management plan to the State

administrative body in charge of the environmental affairs for approval.


of May, 2012/

40.3. The assessment and plan set forth in the Articles 40.1 and 40.2 of this law shall be

approved as set forth in the Articles 38.2 and 39.2 of the law.

Article 401. Protection of cultural heritage

401.1. A license holder shall fulfill the obligations set forth in the Law on Protection of Cultural

Heritage and the Articles 402 and 46 of this law.

401.2. It shall be prohibited to commence prospecting, exploration and mining activities without

first getting the permission of organizations that specialize in paleontology, archeology, and

ethnic studies after they study and research the mining area.

/Article 401 was added by the legislation enacted on the 15

th of May, 2014/

Article 402. The license holder’s obligations regarding the protection of cultural heritage

402.1. The license owner shall assume the following obligations in relation to the protection of

cultural heritage:

402.1.1. provide the authorized state and local administrative agency officials and state inspectors

that supervise the implementation of the Law on Protection of Cultural Heritage with access to

the exploration area and conduct inspection activities in the area;

402.

1.2. ensure that the cultural heritage artifacts found during prospecting and exploration

activities are protected in their entirety, register them in the cultural heritage database in

compliance with law, and notify relevant organizations to transfer and store the artifacts.

/Article 402 was added by the legislation enacted on the 15

th of May, 2014/

Article 41. Compensation for damages to property

License holders shall fully compensate owners and possessors of private and public residential

dwellings, wells, winter animal shelters, other structures, and historic and cultural landmarks for

the damages caused by exploration or mining operations, including, if necessary, relocation

costs.

Article 42. Relations with local administrative bodies

42.1. The license holder shall cooperate with the local administrative agency on issues related to

environmental protection, operating the mine, developing the infrastructure of the production,

and increasing employment opportunities by making a contract.

42.2. A license holder in cooperation with the local administrative agency may organize a public

forum in relation to issues set forth in the Article 42.1.

42.3. The Citizens may elect a representative whose obligation is to monitor the license holder’s

activities and his/her efforts to rehabilitate the environment.


of July, 2009/

Article 43. Employment requirements

43.1.The license holders and their contractors shall have the obligation to provide job placements

to the citizens of Mongolia and no more than 10% of employees working for the legal entity may

be foreign citizens.


43.2. If the number of foreign citizens employed exceeds the percentage set forth in the Article

43.1, the license holder shall pay 10 times the minimum monthly salary for each foreign citizen

for every month.

43.3. The payment set forth in the Article 43.2 of this law shall be submitted to the budget of the

relevant soum or district and shall be disbursed to the promotion of the employment, creation of

new job, educational and health sectors. Relevant procedures shall be approved by Citizens

Representatives Khural of the relevant soum or district.


of February, 2016/

Article 44. Ensure health and safety standards

44.1. The license holder shall carry out activities that ensure the safety of citizens of the relevant

soum or district as well as labor safety and hygiene of his/her employees as set forth in the

applicable laws and regulations.

Article 45. Requirements for closure of a mine

45.1. If the license holder partially or completely closes the mining or enrichment factories,

he/she shall notify the State administrative body at least one year prior to such closure and take

an appropriate preparatory measure pursuant to the Clause 10.1.14 of this law.


of May, 2012/

/This section was re-edited by the legislation enacted on the 01st of July, 2014/

45.1.1.take all necessary measures to ensure safe use of the mining area for public

purposes and to rehabilitate the environment;

45.1.2. take preventive measures if the mine claim may be dangerous for public use;

45.1.3. remove all machinery, equipment and other property from the mining area except

those permitted by local administrative bodies or the agency for specialized inspection.

45.2. Mining license holders shall prepare a detailed map of an appropriate scale showing

dangerous or potentially dangerous areas created by mining operations and place necessary

warnings and markings in the vicinity of the mining claim and shall submit the map to the

agency for specialized inspection and the local Governor.

Article 46. Registration and sale of precious stones and metals

46.1. All precious stones and metals extracted by mining license holders shall be assayed and

registered by the State administrative body in charge sample.


of December, 2008/

46.2. Regulations on assaying and registration of precious stones and metals and a list of

minerals and precious stones subject to assaying and registration shall be approved by the

Government.

46.3. Mongolbank shall purchase precious stones and metals at the international market price.

46.4. A mining license holder may export the precious stones and extracted metals through the

Mongolbank.

46.5. If a nugget weighs more than 400 grams, a nugget has a peculiar shape but weighs less than

that, or a precious stone has rare color and shape are explored, the license holder is obliged to

sell it to the treasury fund of Mongolbank at premium rate.

Article 47. Royalties

47.1. A mining license holder shall pay royalties to the State budget on the sales value of all

products extracted from the mining claim that are sold, shipped for sale, or used.

/This section was re-edited by the legislation enacted on the 23rd

of December, 2011/

47.2. The sales value specified in the Article 47.1 of this Law shall be determined as follows:

47.2.1. for exported products, the sales value shall be the international market price of the

product or that of a similar product that is determined by the principles of determining the

average monthly prices of the products, or similar products that are recognized by the

international market;

47.2.2. for products sold or used on the domestic market, the sales value shall be based on

the domestic market price for the product or a similar product;

47.2.3. If the sales value of domestically or internationally sold products cannot be

determined, the sales value shall be determined by the revenue derived from the sale of the

product as declared by the license holder.

47.3. The royalty rates shall be as follows:

47.3.1. royalties for domestically sold coal shall be two and one-half (2.5) per cent of the

sales value of all products extracted from the mining claim that are sold, shipped for sale, or

used;

/This provision was re-edited by the legislation enacted on the 23rd

of December, 2011/

47.3.2. royalties for extracted products other than those set forth in the Clause 47.3.1 and

the gold sold to the Bank of Mongolia or to the banks authorized by the Bank of Mongolia

specified in the Clause 47.3.3 shall be five (5.0) per cent of the sales value of all products

extracted from the mining claim and sold, shipped for sale, or used.


of November, 2010/


of January, 2014/

47.3.3. royalties for the gold sold to the Bank of Mongolia or to the banks authorized by

the Bank of Mongolia shall be 2.5 percent of the royalties for using the mining reserves as

indicated in the Clause 47.3.2. and the rate of additional royalties shall be 0 percent of the

additional royalties specified in the Article 47.5 of this law.


of January, 2014 and this

provision will be effective from the 24th

of January, 2014 until 01st

of January, 2019/

47.4. Depending on the increase of market price for the mineral in question, the royalty shall be

calculated by adding the rate stated in the Article 47.5 of this Law to the royalty rate as specified

in Clause 47.3.2 of this Law.


of November, 2010/

47.5. The additional payment specified in the Article 47.4 of this Law shall be calculated as

follows:

№ Types of

Minerals

Unit of

Measure

Reference

Products

Future

Market

Price

(USD)

Surtax Royalty Rates based on

the Degree of Processing

Ore Concentrate Product

1 Copper Tonne Copper (pure

metal)

0-5000 0.00 0.00 0.00

5000-

6000 22.00 11.00 1.00

6000-

7000 24.00 12.00 2.00

7000-

8000 26.00 13.00 3.00

8000-

9000 28.00 14.00 4.00

9000 and

above 30.00 15.00 5.00

2 Gold Ounce

Gold

(chemically

pure)

0.9 - - 0.00

900-

1000 1.00

1000-

1100 2.00

1100-

1200 3.00

1200-

1300 4.00

1300 and

above 5.00

3 Zinc Tonne Zinc (pure

metal)

0-1500 0.00 0.00 0.00

1500-

2000 1.00 0.80 0.40

2000-

2500 2.00 1.60 0.80

2500-

3000 3.00 2.40 1.20

3000-

3500 4.00 3.20 1.60

3500 and

above 5.00 4.00 2.00

4 Molybdenum Tonne Molybdenum

0-35000 0.00 0.00 0.00

35000-

40000 1.00 0.80 0.50

40000-

45000 2.00 1.60 1.00

45000-

50000 3.00 2.40 1.50

50000-

55000 4.00 3.20 2.00

55000

and

above

5.00 4.00 2.50

5 Iron Tonne Iron ore

0-60 0.00 0.00 0.00

60-70 1.00 0.70 0.40

70-80 2.00 1.40 0.80

80-90 3.00 2.10 1.20

90-100 4.00 2.80 1.60

100 and

above 5.00 3.50 2.00

6 Tungsten Tonne Tungsten

concentrate

0-25000 0.00 0.00

-

25000-

30000 1.00 0.80

30000-

35000 2.00 1.60

35000-

40000 3.00 2.40

40000-

45000 4.00 3.20

45000

and

above

5.00 4.00

7 Fluorite Tonne

Fluorite ore

and fluorite

concentrate

0-80 0.00 0.00

-

80-90 1.00 0.90

90-100 2.00 1.80

100-110 3.00 2.70

110-120 4.00 3.60

120 and

above 5.00 4.50

8

Fluorite

flotation

concentrate

Tonne

Fluorite

flotation

concentrate

0-200 - 0.00

-

200-230

0.70

230-260

1.40

260-290

2.10

290-320

2.80

320 and

above 3.50

9 Tin Tonne Tin

0-17000 0.00 0.00 0.00

17000-

18000 1.00 0.80 0.50

18000-

19000 2.00 1.60 1.00

19000-

20000 3.00 2.40 1.50

20000-

21000 4.00 3.20 2.00

21000

and

above

5.00 4.00 2.50

10 Lead Tonne

Lead (pure

metal) 0-1500 0.00 0.00 0.00

1500- 1.00 0.80 0.40

1800

1800-

2100 2.00 1.60 0.80

2100-

2400 3.00 2.40 1.20

2400-

2700 4.00 3.20 1.60

2700 and

above 5.00 4.00 2.00

11 Unprocessed

coal Tonne Coal

0-25 0.00

- -

25-50 1.00

50-75 2.00

75-100 3.00

100-125 4.00

125 and

above 5.00

12

Processed

coal (dry and

wet

processing)

Tonne Coal

0-100

-

0.00

-

100-130 1.00

130-160 1.50

160-190 2.00

190-210 2.50

210 and

above 3.00

13

End products

(semi-coke,

coke, gas,

liquid fuel,

coal chemical

products)

Tonne Coke

0-160

- -

0.00

160-190 0.50

190-210 1.00

210-240 1.50

240-270 2.00

270 and

above 2.50

14 Silver Ounce Silver 0-25 - - 0.00

(chemically

pure) 25-30 1.00

30-35 2.00

35-40 3.00

40-45 4.00

45 and

above 5.00

15 Magnesite Tonne Magnesia

concentrate

0-100 0.00 0.00

-

100-120 1.00 0.90

120-140 2.00 1.80

140-160 3.00 2.70

160-180 4.00 3.60

180 and

above 5.00 4.50

16 Aluminum Tonne Aluminum

(pure metal)

0-2300 0.00 0.00 0.00

2300-

2600 1.00 0.90 0.50

2600-

2900 2.00 1.80 1.00

2900-

3200 3.00 2.70 1.50

3200-

3500 4.00 3.60 2.00

3500 and

above 5.00 4.50 2.50

17 Rare earth

elements Kg

Rare earth

elements

oxide

concentrate

0-10 0.00 0.00

-

10-20 1.00 0.90

20-30 2.00 1.80

30-40 3.00 2.70

40-50 4.00 3.60

50 and

above 5.00 4.50

18 Phosphate Tonne Concentrate

0-70 0.00 0.00 0.00

70-90 1.00 0.90 0.50

90-110 2.00 1.80 1.00

110-130 3.00 2.70 1.50

130-150 4.00 3.60 2.00

150 and

above 5.00 4.50 2.50

19 Zeolite Tonne Celite

(цеолит)

0-200 0.00 0.00

-

200-250 1.00 0.90

250-300 2.00 1.80

300-350 3.00 2.70

350-400 4.00 3.60

400 and

above 5.00 4.50

20 Quartz vein Tonne Quartz

0-30 0.00 0.00

-

30-40 1.00 0.90

40-50 2.00 1.80

50-60 3.00 2.70

60-70 4.00 3.60

70 and

above 5.00 4.50

21 Rock salt Kg Salt

0-40 0.00 0.00

-

40-50 1.00 0.90

50-60 2.00 1.80

60-70 3.00 2.70

70-80 4.00 3.60

80 and 5.00 4.50

above

22 Potash Tonne Potash

0-140 0.00 0.00

-

140-150 1.00 0.90

150-160 2.00 1.80

160-170 3.00 2.70

170-180 4.00 3.60

180 and

above 5.00 4.50

23 Gypsum Tonne Gypsum

0-9 0.00

- -

9-11 1.00

11-13 2.00

13-15 3.00

15-17 4.00

17 and

above 5.00


of November, 2010/

47.6. The Government shall determine the method for calculating rate of royalties and imposing

the payment pursuant to the Clauses 47.3.1, 47.3.2, 47.4 and 47.5 of this law.


of November, 2010/

47.7. The additional royalty rate shall be imposed on either of ore, processed mineral or end

product without duplication depending on the level of processing.


of November, 2010/

47.8. The requirements, classifications, basic principles for calculation and methodology of the

level of processing ore, concentrate or the end product stated in the Article 47.5 of this Law shall

be adopted by the Government based on a proposal submitted by the state administrative central

authority in charge of the geology, mining and finance.


of November, 2010/

47.9. The holder of an exploration license may sell the minerals he/she experimentally extracted

on the basis of obtaining the approval of the \ agency for specialized inspection after registering

the type and quantity of the minerals with the agency. The exploration license holder shall pay

the royalties at the same rate as the holder of a mining license.


of November, 2010/

47.10. The person responsible for royalty payments shall pay the royalties on all products that

were extracted to be sold, shipped for sale, or used during a certain season within the 20th

of the

first month of the subsequent season.


of November, 2010/


of June, 2015/

47.11.The holder of a mining license shall prepare a seasonal report on the quantity of the

product that was extracted to be sold, shipped for sale, and used during each season as well as on

its sales assessment. The report shall comply with the template issued by the agency for

specialized inspection and delivered to the agency.

/This section was added by the legislature enacted on the 25th

of November, 2010/

47.12. The Government shall declare the name of the exchange that determines the average

international price both of which serves as the basis of the export sales assessment to the public

considering the name and the type of the product.


of November, 2010/

47.13. A taxpayer that owns a stabilization certificate pursuant to the Law on Investment shall

pay the royalties at the rate specified in the certificate.

/This section was added by the legislation enacted on the 3rd

of October, 2013/

471 дүгээр зүйл.Түгээмэл тархацтай ашигт малтмалын нөөц ашигласны төлбөр

471.1.Ашиглалтын тусгай зөвшөөрөл эзэмшигч нь олборлож худалдсан, эсхүл

худалдахаар ачуулсан болон ашигласан бүх төрлийн түгээмэл тархацтай бүтээгдэхүүний

борлуулалтын үнэлгээнээс тооцож түгээмэл тархацтай ашигт малтмалын нөөц ашигласны

төлбөрийг орон нутгийн төсөвт төлнө.

471.2.Түгээмэл тархацтай ашигт малтмалын нөөц ашигласны төлбөр нь олборлож

худалдсан, эсхүл худалдахаар ачуулсан болон ашигласан бүх төрлийн түгээмэл тархацтай

ашигт малтмалын бүтээгдэхүүний борлуулалтын үнэлгээний 2,5-5 хувьтай тэнцүү байна.

471.3.Энэ хуулийн 47

1.2-т заасан төлбөрийн хувь хэмжээг тухайн түгээмэл

тархацтай ашигт малтмалын тархац, шинж чанар, байгаль орчинд нөлөөлөх байдлыг

харгалзан аймаг, нийслэлийн иргэдийн Төлөөлөгчдийн Хурал тогтооно.

/Энэ зүйлийг 2011 оны 12 дугаар сарын 23-ны өдрийн хуулиар нэмсэн/

/This Article was considered as annulled by the legislation enacted on the 16th

of

January, 2014/

Article 472. Royalties on mineral deposits of strategic importance

472.1. If the parties agree to transfer the government shares of mining deposits of strategic

importance with the approval of the competent authority, the party that is receiving the shares

(i.e. the license holder) shall pay the royalties on the mining deposits of strategic importance to

the State budget pursuant to the Article 47.2 of this Law.

472.2. The Government shall approve the percentage and amount of the royalties on mineral

deposits with strategic importance set forth in the Article 472.1 of this Law.

472.3. Percentage and amount of the royalties on mineral deposits with strategic importance set

forth in the Articles 5.3-5.5 of this Law shall not exceed 5 percent based on the characteristic of

the mineral deposit.

/This Article was added by the legislation enacted on the 18th

of February, 2015/

Article 473. Royalties on mineral products extracted from derivative deposits

473.1. The royalties on the products extracted from derivative deposits shall be 2.5 percent of that

product’s sales assessments, and the additional royalties set forth in the Article 47.5 of this law

shall be 0 percent.

473.2. An additional royalties on gold shall be imposed pursuant to the Articles 47.4 and 47.5 of

this law, disregarding the Article 473.1 of this law.

473.3. The sales assessment set forth in the Articles 47

3.1 and 47

3.2 of this law shall be

determined pursuant to the principles set forth in the Article 47.2 of this law.

/This Article was added by the legislation enacted on the 10th

of November, 2016/

Article 48. Submission of information and reports

48.1. An exploration license holder shall accurately prepare the following information and

reports on a timely basis and submit copies to the agency for specialized inspection and State

administrative body, respectively:

48.1.1.the exploration work plan shall be delivered within 30 days of granting exploration

license and annual plans thereafter shall be delivered within April 15th

of that year.


48.1.2. the annual report on exploration work shall be prepared in accordance with the

guidance approved by the State administrative body and shall be delivered by the 15th

of

February of that year.


48.1.3. annual report on safety set forth in the Article 44 of this law shall be submitted by

the 20th of January of that year.

48.2. The report set forth in the Clause 48.1.2 shall contain information on the work completed

and expenses incurred in reconnaissance, geophysical and geochemical work, drilling and other

activities, information on the labor force, and the results of the exploration work. A map

indicating the locations where the work was done shall be attached to the report. This map shall

be prepared according to the State geodesy system.

48.3.The Exploration license holder shall, before the expiry of the license term, develop and

deliver to the State administrative body a report on the deposit reserve and the results of the

prospecting and exploration work in accordance with the regulations on prospecting and

exploration activities and and the classification of mineral resources and deposit reserve after the

report has been verified by an analyst.


48.4.The State administrative body shall appoint a specialized analyst from the Professional

mineral resources council to the report set forth in the Article 48.3 of this law and the feasibility

study set forth in the Clause 48.6.1 of this law within 30 days and order it to make assessments

on these within 90 days. Based on such assessment, the State administrative body shall decide

whether to register the mineral deposit and the feasibility study in the state information database.


48.5. The State administrative agency shall have the right to demand information and reports

from the license holder if the information or reports are incomplete.

48.6. A mining license holder shall submit the following information and reports to the State

administrative agency within the following timeframe:

48.6.1. the mining license holder shall prepare the feasibility study to be used on the

deposit through a competent authority and shall deliver the document within within 1 year upon

obtaining the mining license;


48.6.2. the mining works plan that include next year’s production major indicators and

deliver within the 1st of December (prepared according to the approved format);


48.6.3. to conduct mining exploration to increase the level of reserve of the mining area

in a timely manner and prepare and deliver the works plan, the yearly and exploration works

report done pursuant to the Clause 48.1.2 of this law.


48.7. The report set forth in the Clause 48.6.3 of this law shall contain the following:

48.7.1. the number of work days, number of employees, and all agreements and contracts

related to the license holder's property;

48.7.2. information on implementation of the mining works plan, an estimate of changes

in reserves, time periods of operation for the mine, a general overview of production facilities,

and any expansion or renovation of such facilities;

48.7.3. information on the quantity of ore extracted, the quantity of products produced,

shipped, and sold, the price of the products, information of the purchasers, information on

investments made during the year, operating expenses, royalties, information on the equipment

and technology used in mining operations, and information on other related properties;

48.7.4. a report on safety set forth in the Article 44 of this law.

48.8. A license holder shall prepare a report on the implementation of the environmental

management plan as set forth in the Articles 38 and 39 of this law and submit it to the relevant

authorities.


of May, 2012/

48.9. A license holder shall submit a quarterly report on royalties as set forth in the Clause 48.7.3

of this law in accordance with the form approved by the tax office and based on the quarterly

increased price on the 20th calendar day following the end of each quarter, and a year-end report

by January 20 of the following year.

48.10. A license holder shall report to the public the amount of its product sales of the year and

the amount of taxes and payments paid to the State and local budget within the first (1st) quarter

of the following year.

48.11. The forms set forth in the Clauses 48.6.2 and 48.6.3 of this law shall be approved by the

head of State administrative body.

48.12 The report on exploration works set forth in the Article 48.3 of this law and the feasibility

study set forth in the Clause 48.6.1 of this law shall be developed and independently assessed by

specialists or authorized legal entities.


48.13. The holder of a license for a derivative deposit shall submit the following year’s major

indicators of production and works plan within the timeframe set forth in the Clause 48.6.2 of

this law and that year’s works report within the timeframe set forth in the Clause 48.1.2 of this

law to the state administrative body in charge of geological and mining.


of November, 2016/

48.14. The holder of a license for a derivative deposit shall submit the report on royalties set

forth in the Article 473 of this law to the tax office in accordance with the Article 48.9 of this law

and make a relevant announcement to the public pursuant to the Article 48.10 of this law.


of November, 2016/

CHAPTER SEVEN

TRANSFER AND MORTGAGE OF LICENSES

Article 49. Transfer of licenses

49.1. If the holder of a mining or an exploration license is reorganized through merger and

consolidation procedures pursuant to the Civil Code, Company Law, and Law on Partnership, the

new successors, the subsidiaries, or affiliated companies may transfer its license to the parent

company.

49.2. An exploration license holder may transfer the license to the buyer only after it has been

proven that the sale of the information on exploratory primary materials and reports was made in

compliance with the relevant laws and after verifying that the relevant taxes were paid.

49.3. A mining license holder may transfer the license to the buyer only after it has been proved

that the sale of the mining technology and equipment as well as the relevant documents was

made in compliance with the relevant laws and after verifying that the relevant taxes were paid.

49.4. The party who is transferring a license as set forth in the Articles 49.1-49.3 of this law shall

submit application regarding such transfer that complies with the approved form along with the

following documents:

49.4.1. the license that is being transferred;

49.4.2. a document evidencing that the transferee meets all the requirements set forth in

the Article 7.1 of this law;

49.4.3. acknowledgement that the transferee shall accept all the rights and duties that

arise pursuant to the license transfer;

49.4.4. if transferring a mining license, reference by the environmental office on

rehabilitation of the area affected by extraction;

49.4.5. evidence that the funds necessary for the rehabilitation of the environment are

deposited in the accounts set forth in the Clauses 38.1.8 and 39.1.9 of this law;

49.4.6. evidence that the exploration work plan and reports have been submitted to the

State administrative body;

49.4.7. evidence that the service fee has been paid;

49.4.8. the price that has been set according to methodology provided by Article 16.14 of

the Law on Corporate Income Tax, explanations and introductions.

49.5. Upon receiving the application set forth in the Article 49.4 of this law, the State

administrative body shall register it and clarify the following:

49.5.1 whether the application complies with the requirements of this Article;

49.5.2. whether the license to be transferred is valid;

49.5.3. whether the license transferee meets the requirements set forth in section 7.1 of

this law

49.5.4. whether the license fees have been paid in a timely manner;

49.5.5. whether the exploration expenses have met the minimum cost set forth in the

Article 33 of this law.

49.6. The actions set forth in the Article 49.5 of this law shall be completed within 5 days of

registering the application, and one of the following decisions shall be made:

49.6.1. record the transfer of the license and make appropriate notations on the license

certificate if there are no violations of the law and the tax authority has issued the certificate that

relevant taxes had been paid; or

49.6.2. if the application does not meet the requirements set forth in this Article, require

the additional information from the applicant;

49.6.3. if the transferee is not eligible to hold a license, or the license to be transferred is

invalid, reject the application, return the relevant documents, and notify the applicant.

49.7. In the event the license holder is reorganized through separation and division according to

Civil Law, Company Law, or Partnership Law, the license shall be returned to the State

administrative body. This license shall be reissued according to the tender procedure as set forth

in the Clause 10.1.2 of this law.

49.8. If the license holder that is reorganized as defined in the Article 49.7 of this law has

satisfied the requirements pursuant to the Article 7.1 of this law, the legal entity shall have a

preemptive exclusive right to reacquire the license.

49.9. The expenses and fees set forth in the Articles 32.2, 32,3, and 33.1 of this law shall be

calculated on the same basis for the transferee of the license, and the new license holder shall

start paying these fees at the beginning of the next year.

49.10. If a dispute over a license is being reviewed by the court, the license shall not be

transferred until the court’s decision is made.

49.11. The State administrative body shall notify the agency for specialized inspection and the

State administrative body in charge of tax affairs of the license transfer and publish about it in a

daily newspaper.

49.12. In case when the ultimate holder, as provided by Section 3.1.11 of the Article 3 of the

Law on Registration on Legal Entity, indirectly transfers a minerals license, then the license

holder shall notify the tax authority of relevant jurisdiction by sending the document provided by

Article 49.4.8 of this Law within 10 days since making the decision [to transfer the license].

Article 50. Transfer of parts of licensed areas

50.1 A license holder may transfer parts of the licensed area to the other persons eligible to hold

a license as set forth in the Article 49 of this law. In this case, the shape, size and location of the

transferred and retained parts shall comply with the requirements of this law.

50.2. The transferring of a part of a licensed area pursuant to the Article 50.1 of this law shall be

registered with the State administrative body pursuant to the Clause 49.6.1 of this law.

50.3 The application to record the transfer of a part of a licensed area shall contain a description

of the land to be transferred and the information set forth in the Articles 17 and 24 of this law,

and it shall also include the application processing fee payment receipt.

50.4 The State administrative body shall verify and confirm that the transferred area lies entirely

within the boundaries of the licensed area covered by the transferor’s license.

50.5 The State administrative body shall implement the registration set forth in the Article 50.2

of this law by the following procedure:

50.5.1 record the location and coordinates of the transferred and retained parts of the

licensed area in the license and cartographic registries;

50.5.2 make a note on the transferor’s license of the location and coordinates of the

transferred and retained parts of the licensed area

50.5.3 grant the transferee a separate exploration and mining license for the area acquired

through the transfer.

50.6 The State administrative body shall notify the organizations set forth in the Article 49.11 of

this law of registry it conducted pursuant to the Article 50.5 of this law.

Article 51. Pledges of licenses

51.1. To provide security for the financing of its investments and operations of a particular

project, a license holder may pledge its licenses to a bank or non-banking financial organization

with the related documents, such as, the exploration work report, geological information, and

feasibility study report and other related documents, and properties which are permitted to pledge

by law. A license alone shall not be a pledge item.

51.2. The license holder shall submit a copy of the pledge agreement together with the license

and the application to the State administrative body.

51.3. If the license pledge agreement meets the requirements set forth in this law, the State

administrative body shall register it along with the license number and the names and addresses

of the parties. The license shall be stored in the possession of the pledgee.

51.4. Upon the termination of the pledge agreement, the license holder shall submit an

application to remove the pledging information from the registration to the State administrative

body together with the following documents:

51.4.1. a statement signed by the pledgee that the license holder has fulfilled its

obligations under the pledge agreement;

51.4.2.the pledged license.

51.5. Upon receipt of the documents set forth in the Article 51.4 of this law, the State

administrative body shall record the termination of the pledge.

51.6. The pledgee shall not assume the obligations of the license.

51.7. If the license holder fails to fulfill its obligations under the pledge agreement or there are

grounds for termination of the license as set forth in the Articles 22 and 28 of this law, the State

administrative body shall notify the pledgee of such grounds and circumstances, and the pledgee

shall have the right to propose a transfer of the license to a person eligible to hold the license as

set forth in the Article 7.1 of this law.

51.8. The State administrative body shall notify the pledgee of the expiration of the license 14

days prior to the expiration date. Within 10 days of receiving the notice, the pledgee shall deliver

its proposal to transfer the license as set forth in the Article 51.7 of this law.

Article 52. Transfer of a license pursuant to a pledge agreement

52.1. In the event the license holder fails to fulfill its obligations under the pledge agreement and

the pledgee wishes to transfer the license to a person eligible to hold the license, the pledgee

shall submit a license transfer application as set forth in Article 49 of this law along with the

following documents to the State administrative body:

52.1.1. proposal of the pledgee submitted according to the Article 51.7 of this law;

52.1.2. confirmation by the transferee of the license that it has agreed to accept the

pledged documents and properties along with the license set forth in the Article 51.1 of this law;

52.1.3. pledged license;

52.1.4. documentation proving the eligibility of the transferee to hold a license as set

forth in the Article 7.1 of this law.

52.1.5. confirmation by the transferee of its acceptance of the rights and obligations that

will arise upon transfer of the license.

52.2. The State administrative body shall review the document set forth in the Article 52.1 of this

law and make a decision to record the transfer of the license.

CHAPTER EIGHT

TERMINATION OF EXPLORATION AND MINING LICENSES

Article 53. Grounds of termination of license

53.1. A mining or exploration license shall be terminated in the following cases:

53.1.1 expiration of the license term;

53.1.2 if the license holder has returned the area allocated by the license wholly pursuant

to the Article 54;

53.1.3 revocation of the license by the State administrative body.

53.2 A license shall be terminated as if the certain part of the area allocated by the license has

been returned by the license holder.

53.3 Upon termination of the license, the license holder shall not be excused from the obligations

with respect to environmental protection, rehabilitation, and mine closure as set forth in the

Articles 38, 39 and 45 of this law and other obligations pursuant to the Law on environmental

protection.

53.4 Upon termination of the license, the license holder shall return the license to the State

administrative body and a new license may be granted for the area pursuant to this law.

53.5 The ownership of buildings, structures, equipment and other property allowed to remain on

the exploration or mining area as set forth in the Clause 45.1.3 of this law shall be determined

according to the provisions of the Civil Code.

53.6. It shall be prohibited to grant a license for using a derivative deposit for an area formerly

subject to a license.


of November, 2016/

Article 54. Surrender the entire licensed area

54.1. A mining or exploration license holder may voluntarily submit an application that complies

with the form approved by the State administrative body to surrender the entire licensed area.

54.2. Evidences that the license holder has met the obligations regarding the environmental

protection and preparing reports and information pursuant to the legislation and followed the

procedure of closing a mine shall be attached to the application.

54.3. Upon receiving the application set forth in the Article 54.1 of this law and verifying that the

license holder has met the requirements set forth in the Article 54.2 of this law, the State

administrative body shall make the appropriate changes to the license and cartographic registries.

54.4. Upon surrendering the entire licensed area, the license holder shall return the license to the

State administrative body.

54.5. The State administrative body shall notify the relevant authorities of the surrender of the

entire licensed area and publish about it in a daily newspaper.

54.6. A license holder that surrenders a licensed area shall not have the right to submit a new

application for the same area for a period of 2 years following the surrender.

Article 55. Surrender of part of the licensed area

55.1. A mining or exploration license holder may surrender a part of the licensed area pursuant to

this Article.

55.2. A license holder shall submit an application that complies with the form approved by the

State administrative body for surrendering part of the licensed area together with the description

of the surrendered part. In the case of surrendering part of an exploration area, the description of

the surrendered area shall meet the requirements of the Article 17.2 of this law; and in the case of

surrendering part of a mining area, the description of the surrendered area shall meet the

requirements of the Article 24.4 of this law.

55.3. The following documents shall be attached to the application for surrendering part of a

licensed area:

55.3.1. the mining or exploration license;

55.3.2. documentation from the Governor and environmental inspection agency of the

relevant soum or district stating that the license holder has fulfilled the obligations of

environmental protection plan for the surrendered area;

55.3.3. the report set forth in the Clauses 48.1.2 and 48.6.3 of this law.

55.4. The area retained by the license holder after the surrender shall meet the requirements of

the Articles 17.2 and 24.4 of this law.

55.5. If the application for surrender meets the requirements of the Articles 55.2-55.4 of this law,

the State administrative body shall register the application, the license shall be modified

accordingly, and the part of the licensed area shall be considered surrendered.

55.6. The State administrative body shall notify the relevant organizations of the surrender of a

part of the licensed area and publish about it in a daily newspaper.

55.7. The surrender of a part of a licensed area shall not entitle the license holder to a refund or

discount of the license fees it already paid.

55.8. The license holder shall not have the right to resubmit a license application for the same

area for 2 years after surrendering the licensed area.

Article 56. Revocation of licenses

56.1. The State administrative body shall revoke a license on the following grounds:

56.1.1.the license holder has failed to meet the requirements of the Articles 7.2 and 31 of

this law;

56.1.2. the license holder has failed to pay the license fees within the specified period set

forth in the Article 34.7 of this law;


56.1.3. an exploration or a mining area has been designated as special purpose territory or

as a reserve pursuant to the Clause 13.1.3 of this law, or mining and exploration activities are

prohibited on that area, and the license holder has been fully compensated;


of July, 2009/

56.1.4. the exploration expenditures of a particular year is lower than the minimum cost

of exploration set forth in the Article 33 of this law;

56.1.5. the State central administrative body in charge of the environmental affairs has

make a conclusion based on a suggestion of the local administrative bodies regarding that the

license holder had failed to fulfill its environmental rehabilitation duties.

56.1.6.стратегийн ач холбогдол бүхий салбарт үйл ажиллагаа явуулж байгаа аж ахуйн

нэгжид гадаадын хөрөнгө оруулалтыг зохицуулах тухай хууль тогтоомжийг зөрчсөн.

56.1.7. it is proven that the exploration area contains cultural heritage artifacts


of May, 2014/

56.1.8. the license holder violates the provisions of the Implementation Law of Law of

Mongolia on Prohibition of mineral exploration and mining operations at headwaters of rivers,

protected zones of water reservoirs and forested areas and violates the provisions of the contract

made pursuant to the laws.

56.1.9. if the license has been transferred in violation of provisions of Articles 49.1, 49.2

and 49.3;

56.1.10. the license holder failed to report relevant taxes according to methodologies

provided by Article 49.4.8 of this Law and Articles 16.11 and 16.14 of the Law on Corporate

Income Tax, or deliberately concealing information required for setting the value or filed a false

report;

56.1.11. failed to send true and correct information to relevant organizations as provided

by Articles 11.1.12 and 15.2.10 of the Law on Registration of Legal Entity and Article 18.1.14 of

the General Tax Law.

/This provision was added by the Legislation enacted on the 18th

of February, 2015/

56.2. Within 10 business days following the determination that grounds for license revocation

exist, the State administrative body shall notify the license holder. The notice shall specify the

grounds for the revocation of the license.

/This section was re-edited by the legislation enacted on the 1st of July, 2014

56.3. If the license holder disagrees with the grounds indicated in the notice set forth in Article

56.2 of this law, the license holder shall submit the grounds for its disagreement to the State

administrative body.

56.4. The State administrative body shall review the documents set forth in the Article 56.3 of

this law. If it determines that the evidence submitted by the license holder establishes that the

grounds for revocation are invalid, the revocation shall be declared invalid; if it does not

establish the invalidity of the revocation grounds, the license shall be revoked. The license holder

shall be notified accordingly.

56.5. If the license holder disagrees with the revocation decision set forth in the Article 56.4 of

this law, the license holder may file a complaint to the court. The court shall not revoke such

revocation decision pursuant to the Clause 62.1.3 of the Law on Administrative Procedure.


of February, 2016/

56.6. If the license holder files a complaint to the court, no license shall be granted for the

licensed area until a court ruling has been made.

56.7. The State administrative body shall notify the agency for specialized inspection if an

exploration license is revoked, and the State administrative body in charge of tax affairs and the

agency for specialized inspection if a mining or a derivative deposit license is revoked and

publish about it in a daily newspaper.



of November, 2016/

56.8. If a decision to revoke a license pursuant to the Article 56.1. of this Law was annulled by a

court decision, the license term shall continue being calculated from the day the court decision

was made.


CHAPTER NINE

INFORMATION, ROYALTY REVENUE DISTRIBUTION, REIMBURSEMENT AND

SPECIFICS OF FINANCE AND ACCOUNTING

Article 57. Access to minerals related information and reports

57.1. An interested entity shall have access to the license and the cartographic registries during

office hours in specially designated rooms.

57.2. Upon the license holder’s request, the State administrative body shall consider the

exploration works report, information on mining operations, and feasibility studies as

confidential during the valid term of the license. The State administrative body may enter into a

confidentiality agreement upon receiving the reports and information.

57.3. The disclosing or publishing of information classified as confidential pursuant to the

Article 57.2 of this law shall be prohibited except as provided in the grounds and procedures of

the Law on state confidentiality, the Law on confidentiality of legal entity, and the Law on

personal confidentiality.

57.4. The State central administrative agencies in charge of the environmental and geology and

mining shall publish and disseminate electronic copies of information on environmental impact

assessment, environmental protection plan, and information about the usage of hazardous

chemicals that may negatively impact human health and of other substances.


of May, 2012/

Article 58. Distribution of royalty revenues

58.1. All royalty payments shall be deposited in the central and local budget.

58.2. The royalty payment shall be distributed as follows: 10% into the budget of the soum or

district, 20% into the budget of the aimag or capital city and 70% into the State budget. Royalty

payment to local areas budgets shall not exceed the annual budget of the soum, district, aimag or

capital.

58.3. Up to 30% of the royalty payment paid to State budget shall be distributed to finance the

geology and mining sector.

58.4. The Government shall approve the procedure to pay, distribute and dispose of the royalty

payment.

Article 59. Distribution of license fees

59.1. The exploration and mining license fee payments shall be deposited into the budget of the

aimag, capital city, soum and district where the exploration area or the mineral deposit is located

in, as well as the State budget.

59.2. The license fee payment shall be distributed as follows: 25% to the soum or district budget,

25% to the aimag or capital city budget and 50% into the State budget

59.3 The Government shall approve the procedures to pay, distribute and dispose of the license

fees.

/Articles 58 and 59 were considered as annulled by the legislation enacted on the 23rd

of

December, 2011/

Article 60. Reimbursement of mineral deposits exploration of which was financed from the State

budget

60.1. The license holder that conducts state-funded exploration works and extracts minerals from

a deposit registered in the national unified registration shall reimburse the costs of the

exploration works to the state budget at the beginning of the extraction process based on the

basis of the terms of an agreement

60.2. Exploration expenses funded by the State budget shall include expenses of general and

detailed exploration work of mineral resources, expenses of exploration-assessment works done

in the licensed area, and the costs incurred at each stage of exploration work.

60.3. For a legal entities privatized pursuant to the Law on State and Local Properties, the costs

of the already completed mining work shall be proportionally subtracted from the expenses of

the State-funded exploration work, and the exploration expenses of the remaining deposit shall

be paid by the legal entity.

60.4. An exploration license shall not be granted for a deposit that is registered in State unified

registration and the exploration work of which and the determination of its reserve was funded

by the State budget.

60.5. The reimbursement agreement shall include the amount of total reimbursement, duration,

and annual installments.

60.6. The annual amount of reimbursement shall be determined on the basis of the annual

production rate.

60.7. If the annual reimbursement is not paid within the time set forth in the agreement, a penalty

of 0.1% of the total amount due shall be imposed for each day the payment is not made.

60.8. The Government shall approve the procedure of calculating and paying amount of the

reimbursement.

60.9. If the reimbursement and penalty set forth in the Articles 60.1 and 60.7 of this law are not

paid within 30 days after the State administrative body gives notice regarding the performance of

the obligations set forth in the reimbursement agreement, the State administrative body shall

revoke the license and announce a tender for the licensed area.

Article 61. Specifics of mining industry finance and accounting

61.1. A license holder shall include all the costs of the exploration activities and activities related

to preparing a mining claim for mining production in a constant manner for a period of 5 years

after the commencement of the production and establish an amortization account.

61.2. The costs of acquisitioning a license, either directly or by transfer, and that of transferring

the area shall be amortized on a straight line basis over the term of the license.

61.3. Fixed assets used in mining operations shall be depreciated on a straight line basis.

61.4. A loss incurred in any tax year may be deducted from taxable income during the two (2)

tax years following the year in which the loss was incurred.

/This section was considered as annulled by the legislation enacted on the 15th

of October, 2009/

61.5. All costs incurred in developing industrial and social infrastructure shall be depreciated on

a straight line basis over the useful lives of the facilities constructed. All costs of maintaining and

operating such infrastructure facilities shall be expensed in that particular fiscal year.

61.6. Repair costs incurred in connection with mining operations shall be included in the

operation cost.

61.7. The State central administrative body in charge of financial affairs shall adopt the

procedures and guidelines regarding the implementation of the provisions set forth in the Articles

61.1-61.6 of this law.

CHAPTER TEN

RESOLUTION OF DISPUTES ARISING IN CONNECTION WITH LICENSES

Article 62. Resolution of boundary disputes

62.1. Border disputes between license holders shall be resolved by the State administrative body.

62.2. The State administrative body shall give all parties involved in the dispute an opportunity

to present their position and arguments in writing.

62.3. The State administrative body shall verify if there is an overlap between disputed areas that

are registered in the license and cartographic registries. If there is an overlap, it shall determine

based on the original applications and reports on border areas, whether the coordinates and

boundaries of the areas were correctly recorded.

62.4. If it is confirmed that there is an overlap based on the results on border areas, the State

administrative body shall modify the area covered by the most recently granted license and

eliminate the overlap.

62.5. The State administrative body shall have disputed boundaries of a licensed area measured

and determined by an authorized professional geodesic surveyor and any costs and loss relating

thereto shall be paid by the party at fault.

62.6. The State administrative body shall verify the coordinates of the disputed area, make the

relevant changes, and notify the parties to the dispute.

62.7. If the parties to the dispute disagree with the decision of the State administrative body, they

may file a complaint to the court.

Article 63. Resolution of disputes between license holders and land

owner, possessor or user

63.1. Courts shall resolve disputes between the license holder and the land owner, possessor or

user over accessing land, passing through the land, or using the land pursuant to the Civil Code

or the Land law.

Article 64. Filing of complaints to State bodies

64.1 The license holder may file a complaint to the relevant competent organizations or officials,

or the Administrative Court regarding the State administrative body, action or inaction of the

officials that has interfered the license holder to exercise of its right as provided by this law.


Article 65. Resolution of disputes arising out of an investment agreement

65.1 Any disputes arising out of an investment agreement according to Articles 29 and 30 of this

law shall be resolved as set forth in the laws and international treaties of Mongolia.

/This Article was considered as annulled by the legislation enacted on the 1st of July, 2014/

CHAPTER ELEVEN

LIABILITIES

Article 66. Liabilities of violating the law

66.1. If a violation of the Mineral law does not constitute a criminal offence, an authorized state

inspector, whilst taking into account the circumstances of the infringement, shall impose the

following penalty on the guilty person:

66.1.1. If a person has conducted exploration activities, extracted, sold minerals, or used

mineral deposits without holding a license, all income or products derived from such illegal

activities shall be confiscated, and the person shall be subjected to a fine equal to 30-50 times the

minimum monthly wage;


66.1.2. If an official fails to provide the information, plans, and mining works report set

forth in the Article 48 of this Law in a timely manner or delivers false information and reports,

the official shall be subjected to a fine equal to 10-20 times the minimum monthly wage, and the

legal entity shall be subjected to a fine equal to 30-50 times the minimum monthly wage;

/This provision was re-edited by the legislation enacted on the 1st of July, 2014/ 66.1.3. If a

citizen, officer, or a legal entity prevents a license holder from exercising the rights conferred to

him/her by this law, the citizen shall be subjected to a fine equal to 5-10 times the minimum

monthly wage, the official shall be subjected to a fine equal to 10-20 times the minimum

monthly wage, and the legal entity shall be subjected to a fine equal to 30-50 times the minimum

monthly wage;


66.1.4. If an official or a legal entity fails to comply with the general obligations set forth

in the Article 35 of this law, the official shall be subjected to a fine equal to 10-20 times the

minimum monthly wage, and the legal entity shall be subjected to a fine equal to 30-50 times the

minimum monthly wage;


66.1.5. If an official or a legal entity that holds a license fails to comply with the

legitimate demands of an authorized state inspector to rectify the violations discovered during

prospection, mining or exploration activities, the official shall be subjected to a fine equal to 10-

20 times the minimum monthly wage, and the legal entity shall be subjected to a fine equal to

30-50 times the minimum monthly wage;


66.1.6. If an official or a legal entity fails to assay and register countermark and quality

of precious metals and gemstones pursuant to this law, the official shall be subjected to a fine

equal to 10-20 times the minimum monthly wage, and the legal entity shall be subjected to a fine

equal to 30-50 times the minimum monthly wage;


66.1.7. If a license holder misreports the quantity of the minerals it extracted, made

contracts with such intentions, intentionally sold them for an unreasonable low price, or

intentionally reduced or attempted to reduce the revenue of the sale, the legal entity shall be

subjected to a fine equal to 10-20 times the minimum monthly wage, and the legal entity shall be

made to pay the difference between the quantity of the extracted minerals and the revenue from

the sale to the State budget;


66.1.8. If an official or a legal entity intentionally destroys the samples or primary

materials taken from the exploration area, the official shall be subjected to a fine equal to 10-20

times the minimum monthly wage, and the legal entity shall be subjected to a fine equal to 20-40

times the minimum monthly wage;


66.1.9. If a citizen, official, or a legal entity fails to comply with the procedures for

regulating relations concerning the operation of a micro mine to extract minerals, the citizen

shall be subjected to a fine equal to 5-10 times the minimum monthly wage, the official shall be

subjected to a fine equal to 10-20 times the minimum monthly wage, and the legal entity shall be

subjected to a fine equal to 30-40 times the minimum monthly wage;



66.2. A court shall impose a fine equal to 10-20 times the minimum monthly wage on any person

who intentionally prevents an authorized official from performing his or her duties in the course

of an inspection.


66.3 If a license holder repeatedly violates the Law on Environmental Protection or the safety

regulations of operating a mine, an authorized state inspector shall halt the license holder’s

prospecting, mining and exploration activities for 2 months. If the violations are not rectified

within this period, the license shall be revoked pursuant to the Article 56 of this law.

66.4. If public health, the environment, or animals are harmed due to the mining license holder’s

failure to comply with the law, safety regulations, or technology regime when using poisonous

chemical substances for mining activities, the license shall be revoked pursuant to the Article 56

of this law, and it shall not be reissued for 20 years.

Article 66. Liabilities of violating the law

66.1. If the violation of this law is not subject to criminal liability, the official who violated the

law shall be subjected to penalties set forth in the Law on Public Service.

66.2. The person or legal entity that violates this law shall be subjected to penalties set forth in

the Criminal law or the Petty Offense Code.

66.3. The license holder that repeatedly violates the safety regulations of operating a mine or the

relevant law shall halt mining and exploration related activities for 2 months. If the violations

are not rectified within this period, the license shall be revoked pursuant to the Article 56 of this

law.

66.4. If public health, the environment, or animals are harmed due to the mining license holder’s

failure to comply with the law, safety regulations, or technology regime when using poisonous

chemical substances for mining activities, the license shall be revoked pursuant to the Article 56

of this law, and it shall not be reissued for 20 years.

/This Article was re-edited on the 4th

of December, 2015/

CHAIRMAN OF THE STATE IKH KHURAL TS. NYAMDORJ