Prime Min­is­ter U.Khurel­sukh’s re­cent prom­ises to ac­tively com­bat in­jus­tice and cor­rup­tion in min­ing, cou­pled with the Min­is­ter of Min­ing D.Su­miyabazar’s move to tem­po­rar­ily sus­pend is­suance of min­ing li­censes, have sent a clear mes­sage of re­form to the min­ing sec­tor.

Will the Prime Min­is­ter and his Cabi­net be able to im­ple­ment the much needed re­form or is this just more of the same pop­ulist rhetoric that politi­cians use to ap­pease vot­ers?

Com­ing out of the gates after be­ing ap­pointed as Prime Min­is­ter in early Oc­to­ber, U.Khurel­sukh made it clear that his Cabi­net would work for the peo­ple. The Prime Min­is­ter un­der­lined that he in­tends to form a “peo­ple’s” gov­ern­ment which will make de­ci­sions to pro­tect the rights of the Mon­go­lian peo­ple and im­prove lives, adding that his gov­ern­ment’s core poli­cies will fo­cus on peo­ple de­vel­op­ment to cre­ate a “wealthy” mid­dle class in years to come.

“I want to be a premier who pur­sues the re­cov­ery of the na­tion’s econ­omy, im­proves peo­ple’s lives, strength­ens dis­ci­pline in the state ap­pa­ra­tus, fights cor­rup­tion se­ri­ously, and brings peo­ple who broke the law to jus­tice,” said U.Khurel­sukh.

One of the ways that the Prime Min­is­ter in­tends to cre­ate a wealthy mid­dle class is his Cabi­net’s stated goal to trans­form the na­tion’s un­der­ground re­sources to “valu­able as­sets over ground”.

This has led to some op­ti­mism among the Mon­go­lian peo­ple, who have for a long time now per­ceived the min­ing sec­tor as cor­rupt and grown to re­sent many for­eign min­ing com­pa­nies op­er­at­ing in Mon­go­lia. As a re­sult, re­source na­tion­al­ism has been on the rise, es­pe­cially after the Oyu Tol­goi agree­ment.

Cabi­net has been smart to pub­li­cally state its in­ten­tion to fo­cus on min­ing as it has be­come a ma­jor cri­te­rion for the peo­ple to grade the per­for­mance of Cabi­net. Politi­cians and po­lit­i­cal par­ties that base their plat­form on clean­ing up the min­ing sec­tor and even re­source na­tion­al­ism have found suc­cess among vot­ers.

U.Khurel­sukh has made it clear that his Cabi­net will ac­tively fight in­jus­tice and cor­rup­tion that has af­fected the is­suance of re­source li­censes dur­ing dis­cus­sions in Par­lia­ment. The Prime Min­is­ter un­der­lined how in­jus­tice in this is­sue has caused re­sent­ment and out­cry from the Mon­go­lian peo­ple.

How­ever, many peo­ple see U.Khurel­sukh and his open­ness to for­eign min­ing com­pa­nies and in­ter­na­tional or­ga­ni­za­tions as the em­bod­i­ment of Mon­go­lia’s shift from strong re­source na­tion­al­ism to a more prag­matic way of think­ing. En­sur­ing re­spon­si­ble and sus­tain­able min­ing has be­come a fo­cus in con­trast to the fear mon­ger­ing of for­eign min­ing com­pa­nies by cer­tain po­lit­i­cal groups that has been preva­lent in the past.

In pol­i­tics, pub­lic per­cep­tion is ev­ery­thing, as it is a key fac­tor in­flu­enc­ing the pol­icy of politi­cians, es­pe­cially in min­ing. Prime Min­is­ter U.Khurel­sukh knows that per­cep­tion is vi­tal in pol­i­tics and in the case of Mon­go­lia. The pub­lic per­cep­tion of min­ing is at the fore­front. For U.Khurel­sukh, that starts with the first step in min­ing, the is­suance of min­ing ex­plo­ration and op­er­a­tion li­censes.

“The cur­rent sys­tem ba­si­cally gives away land and min­ing li­censes to only a few com­pa­nies and in­di­vid­u­als, who own them by the hun­dreds. Those com­pa­nies and in­di­vid­u­als sell their li­censes and land through loop­holes such as trans­fer­ring and gift­ing, which al­low them to avoid taxes. Cabi­net will be fo­cus­ing on stop­ping this sys­tem,” U.Khurel­sukh said.

The Prime Min­is­ter be­lieves that by re­form­ing re­lated leg­is­la­ture, a more trans­par­ent and open sys­tem which sells land to busi­nesses and in­di­vid­u­als through auc­tions will be set.

Cabi­net is re­port­edly in the process of draft­ing a bill to reg­u­late land trade and re­source li­censes, which will help in­crease rev­enue to the state bud­get by 36 bil­lion MNT by 2018.

The new bill be­ing drafted by Cabi­net in­cludes im­prove­ments to the reg­is­tra­tion sys­tem for keep­ing track of land own­ers, prof­its from land, and trans­ac­tions and trans­fers. Through this, Cabi­net will im­pose taxes on trans­ac­tions of land or re­source li­censes. Fail­ure to reg­is­ter and at­tempt to hide ac­tiv­i­ties will re­sult in the re­vo­ca­tion of land or re­source li­censes.

Cabi­net has been able to launch a con­certed ef­fort, with the Prime Min­is­ter’s ad­dresses to Par­lia­ment and Min­is­ter of Min­ing D.Su­miyabazar’s first move as min­is­ter to tem­po­rar­ily sus­pend the is­suance of min­ing ex­plo­ration li­censes.

The Min­istry of Min­ing said that the is­suance of li­censes will con­tinue in late Novem­ber, which con­firms that at least in part, the move to sus­pend the is­suance of min­ing ex­plo­ration li­censes was in­tended to send a sig­nal to both the min­ing sec­tor and the Mon­go­lian peo­ple that change is com­ing.

Whether the Prime Min­is­ter and his Cabi­net will be able to fol­low through on that prom­ise is still up in the air. Only time will tell if Prime Min­is­ter U.Khurel­sukh’s Cabi­net will be the “breath of fresh air” that some peo­ple are hop­ing for in the min­ing sec­tor.

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