AN ANALYSIS OF MINING SECTOR ECONOMICS IN MONGOLIA

This paper provides an assessment of the mining sector and shows how it is critical for further sustainable growth in Mongolia. In 1990, Mongolia transferred from socialism to a parliamentary democracy and since then has implemented political and economic reforms that have constituted a sweeping break from the past; succeeding in a way that very few other post communist nations have been able to do. The Mongolian economy was mostly influenced by agriculture and small and medium sized businesses; however since the late 1990s, the Mongolian capital market has had a strong correlation with the fate of Mongolia’s mining deposits, which are of worldwide interest. If these deposits were exploited, the Mongolian capital market would boom and thus strongly effect the whole economic situation. During the last few years the mining sectors have started to provide an important contribution to the GDP. Unfortunately without previous experience and the appropriate legal environment, the mining industry faces great challenges in further development; at same time investment opportunities for the whole country have been delayed for an uncertain period. Thus, this paper emphasizes how to maintain the sustainability of Mongolian economic growth while identifying and analyzing the main difficulties, challenges and strategic efforts in the mining sector and determining appropriate solutions based on international experience and practices.