China disappointed with the legal environment in Mongolia

2013 оны 1 сарын 17

Chinese representatives expressed their disappointment during the third meeting of the China-Mongolia cooperation commission on mineral resources and energy on Tuesday. Their point is that the legal regime is uncertain and regulations passed by the Government keep changing.

At present the mining sector produces 20.2 percent of the GDP, 88.2 percent of export, 67.7 percent of industrial enterprises.

Over 50,000 employees make their earnings in 400 mining companies proving that this sector has become a big support of Mongolian economy.

But the Mongolian mining sector is heavily reliant on China, therefore only one buyer is big risk for Mongolia.

There were high expectations among Mongolians as to how Chinese representatives would negotiate in a mutually beneficial manner on big issues.

Unfortunately the meeting was held behind closed doors and left the press without answers about whether China would buy quality coal with a reasonable price, help with solutions for the transport network and oil.

The meeting was expected to be open to public, but it was held behind closed door on the request of the Chinese representatives.

During the break of the meeting the Minister for Mining, D.Gankhuyag and the Deputy Director of China"s National Development and Reform Commission, Zhang Xiaoqiang made a joint statement without answering any questions to journalists. In the statement the Minister for Mining, D.Gankhuyag, said the trade cycle between the two countries reached 6.6 billion US dollars last year. China invested 2.3 billion US dollars in Mongolia. They further stated they are in negotiation on infrastructure and railroad projects and that the countries will cooperate in the oil sector in the near future. PetroChina invested 1.4 billion US dollars in Mongolia alone which makes this company the biggest investor in Mongolia. They also stated that they are also negotiating with China on fuel supplies.

The Deputy Director of China"s National Development and Reform Commission, Zhang Xiaoqiang highlighted the need of developing a legal regime in Mongolia to strengthen development of a highly connected railroad and coal transport border between the two countries. According to a study by the Mineral Resource Authority Mongolian coal export will surge up by 32 percent this year.

However, the bad news is that China will buy unprocessed coal for less than 70 US dollars per ton.

This means Mongolian export coal price is 30 US dollar lower than the market price. Importing high quality coal from Mongolia is a big advantage for China.

The Chinese Vice-Premier Li Keqiang assisted in the support of the Mongolian coal transport to third parties via Chinese territory when he met the President of Mongolia, Ts.Elbegorj last year. But many questions are still left without answers.
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