Mongolia hosts 10% of the world's known coal reserves at an estimated 162 billion tonnes in 2011 with 17 operating coal mines. Mongolia exported 73% of the 25 million tons of coal produced in 2010, making it the country's largest export. The largest customer for coal was China, accounting for over 82% of all exported coal. The Tavan Tolgoi, the largest coal site in Mongolia, which has high-grade coal deposits is expected to yield six billion tonnes of coal. While the biggest client for this coal is China, Russia is also likely to be bidder for this coal once the 1,000-kilometre rail link to the country is completed; Japan, Korea and Taiwan are also likely to be beneficiaries to this coal through the Trans-Siberian railway. Mongolia has also initiated coal based power projects and coal-washing plants which will be beneficial to its economic advancement. Coal mining companies include Hunnu Coal.
Copper mining
is a joint venture between the governments of Mongolia and Russia and was established in 1976. Erdenet was accounted for 14% of Mongolia's gross domestic product. While the mine has been exporting copper concentrate since production began, there are plans to create industry within the country to manufacture finished products from concentrate from the mine. In 2001 Canadian-based Ivanhoe Mines discovered the gold-copper ore deposit of what would be developed into the Oyu Tolgoi mine. The deposit is in the Gobi Desert in an area known as Oyu Tolgoi, where in the time of Genghis Khan outcropping rocks were smelted for copper. By 2003 there were 18 exploration drill rigs on the property employing approximately 200 people, and Oyu Tolgoi was the "biggest mining exploration project in the world." In January 2013 Oyu Tolgoi started producing concentrate from the mine. Its location in the South Gobi province, is 50 miles away from the border with China and is termed as a mega-mine in Mongolia. Its mining operations are a joint venture of Rio Tinto, Ivanhoe Mines of Canada and the Mongolian government. As of 2010, the estimated cost of bringing the Oyu Tolgoi mine into production was US$4.6 billion, making it the largest project in Mongolian history; however, by 2013 costs had increased to $10 billion. When in production Oyu Tolgoi will account for more than 30% of Mongolia's GDP. The copper production from this mine has been projected at 450,000 tonnes of copper for the next 50 years; the mining reserves are reported to extend up to 20 miles beneath the Gobi Desert and is also estimated to yield 330,000 ounces of gold annually. A comparative analysis of its progress in 2011 revealed that it exceeded China's progress by double and recorded a 17% growth which has even generated a comment in some quarters that it is no more Mongolia but "Minegolia". Junior mining company Kincora Copper has announced plans to conduct exploration along strike of the Oyu Tolgoi mine with drilling planned in 2017.
Gold mining
The gold mines of importance are the Zaamar gold mine, the Boroo hard rock gold mine, Gatsuurt Gold Mine, and tracer gold extraction by the process of dredging the Tuul River. In addition to Copper, Oyu Tolgoi also has large reserves of gold, and the deposit is assessed to contain 14 million ounces of gold in addition to the 19 million tons of copper. This huge ore deposit is stated to be the second largest discovered and valued at US$46 billion at 2003 prices.
Other minerals
has been found at Erdenet-Ovoo and silver found in Asgat and both are under mining. Uranium is found in Dornod and its mining extraction is a joint venture of Russia and Japan. At Dornod, Russia started mining uranium from 1995 but has been discontinued for some time. The Red Book 2011, Mongolia assessed uranium resources at 74,000 tU, as aginsy a geological prospecting report it could go up to 1.47 million tU. Other areas where uranium prospecting has been fruitful are the Mongol-Priargun uranium province and Gurvanbulag apart from Dornod, in the east and northeast of the country in a volcanogenic mineralisation formation. It is also found in the Gobi-Tamsag uranium province in southern Mongolia which are part of sediments in smaller Dulaan Uul and Nars deposits.
Illegal mining
Many illegal miners in Mongolia are referred to as ninja miners. They get the name from the resemblance the green bowls they carry on their backs have to the shells of the Teenage Mutant Ninja Turtles. After the fall of the People's Republic of Mongolia many people became traditional herders. Two harsh winters in the early 2000s resulted in a massive loss in livestock. After this thousands of Mongolians turned to illegal mining on properties abandoned by larger mining companies.
Impact
The mining activities also have several negative impacts which need timely remedial interventions. The social impacts relate to: A negative feeling that politicians and the rich would exploit the revenue denying benefits to the poor; the resource is non-renewable and could last for another 100 years or so and during this time the traditional livestock herding which sustained the country through its ancient Mongolian cashmere industry should not be allowed to wither away to meet the large water requirements for mining operations affecting the surface and ground water sources ; dirt ridden clouds enveloping the villages, day and night, as the trucks carrying coal and other minerals move on the dirt roads creating health hazards for people as well as to cattle; oft repeated refrain of the people is that there will be "more dust and less water."
Economic incentives to people
Initially, under the Human and Development Fund generated by mining operations, outright cash was distributed to the people. The future plans drawn by the government envisages coverage of health insurance to people, provided free public housing and free education. Under the Erdenes Tavan Tolgoi a state enterprise, every citizen shall get 536 shares as an investment in the mining work.
Environmental mitigation measures
Addressing the environmental concerns raised by the people it is now proposed to build permanent tarred roads to avoid dust. Water extraction will be done from fossil aquifers, which will be treated for removing salinity and used for mining operations and not from lakes and water holes. Water shall be recycled and not let out to flow. Special under passages for animals to cross shall be built wherever required.
Taxation
In 2006 Mongolia implemented a 68% windfall tax, which was the world's highest. The tax was based on profits made by mining companies on copper and gold sales above $2,600 per ton and $850 per ounce respectively. The tax was repealed in 2009 and phased out over the next two years.
