The World Bank Gives Special Attention to Environmental and Social Impacts in the Mining Sector in Mongolia

June 8, 2006

Ulanbaataar, June 8, 2006 - The World Bank attention to environmental issues in the mining sector in Mongolia began in 1998 with a study of the situation in Zaamar, where many local mining deposits had been explored. The study was done at the request from the Ministry of Nature and Environment of Mongolia, and covered both issues pertaining to general EIA process and appropriate environmental management in mining operations.

The report Mongolia - A Review of Environmental and Social Impacts in the Mining Sector”, is the most recent World Bank report investigating the environmental and social performance in the mining sector. This report, among other sources of funding, has supported by the Netherlands-Mongolia Trust Fund for the Environmental Reform (NEMO), and was launched at the National Forum for Mining, Regulation and Environment, held in Ulaanbaatar on May 25-26, 2006.

The report presents an overview of current environmental and social practices in Mongolia’s mining sector including artisanal mining and reviews its regulatory and institutional frameworks and suggests options for their further improvements. In addition, the report includes proposal for short-term strategic priorities for a more efficient, environment friendly use of mining resources in Mongolia.

Tony Whitten, a Senior Biodiversity Specialist of the Environment and Social Development Unit of the East Asia and Pacific Region at the World Bank, and Task Team Leader in his remarks during the opening session of the National Forum for Mining, Regulation and Environment said that “The mining sector growth, and recent increase in commodity prices, increase the environmental pressures faced by the mining sector, which in turn increases the challenges to achieve an effective and sustainable management of Mongolia’s great natural wealth.”

The mining sector is a major contributor to the Mongolian economy, accounting for about 18 percent of GDP, and major part of export earnings of the country. Over the past five years, there has been a rapid rise in mineral exploration, due to the 1997 Minerals Law and the widely publicized discovery of the Oyu Tolgoi copper/gold deposit in 2001. Because of its importance, the mining sector needs for its key stakeholders to discuss the future and challenges of the mining sector, with particular attention to the possible the environmental and social impacts.

The National Forum for Mining, Regulation and Environment provided the opportunity for a forward looking discussion on how to concretely address key environmental and social issues in the mining sector; presenting and discussing issues that stakeholders’ programs and investments have been dealing with; and finding agreement on a common, realistic way forward for mining activities to make progress towards sustainability.

Over 380 participants from government agencies, local level governments, the private sector, civil society, NGOs, bilateral and multilateral institutions attended the two-day, which was sponsored primarily by the Bank (through our Netherlands-Mongolia Trust Fund for Environmental Reform, (NEMO), together with the Office of the President of Mongolia, the Mineral Resources and Petroleum Authority of Mongolia, UNDP, SDC, BGR, and Support for Artisanal Mining Initiatives.