(2022.12.06-ны өдрийн орчуулга)                                  Unofficial translation
 

LAW OF MONGOLIA

July 8, 2006                                                                                           Ulaanbaatar

ON MINERALS

/Revised edition/

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of the law

1.1.The purpose of this Law is to regulate relations with respect to prospecting, exploration and mining of minerals, and protection of exploration field and mining area in use in the territory of Mongolia.

/This paragraph was amended according to the law as of January 8, 2009/

Article 2.Legislation on minerals

2.1.Mineral related legislation consists of the Constitution of Mongolia, the Law on Subsoil, Law on Land, Law on Environmental Protection, Law on National Security, Law on Investment, this Law and other relevant legislation which is consistent with these laws.

/Addendum was made to this paragraph according to the law as of October 3, 2013/

/Addendum was made to this paragraph according to the law as of May 17, 2012/

2.2.If an international treaty to which Mongolia is a party provides otherwise, the provisions of the international treaty shall prevail.

Article 3.Scope of this Law

3.1.This law shall regulate relations with respect to prospecting, exploration and mining of all types of mineral resources except water, petroleum, natural gas, radioactive and common minerals.

/Addendum was made to this paragraph according to the law as of January 9, 2014/

/This paragraph was amended according to the law as of July 16, 2009/

3.2.Relations with respect to exploitation of minerals by artisanal mining shall be regulated by a regulation and the regulation shall be approved by the Government.

/This paragraph was modified according to the law as of July 1, 2010/

3.3.Relations concerning common mineral exploration and exploitation shall be regulated by a special law.

/This paragraph was added according to the law as of July 1, 2014/

Article 4.Definitions of terms

4.1.In this Law the following terms shall have the following meaning:

4.1.1."mineral" means any usable naturally occurring mineral accumulation that was formed on the surface or in the subsoil as the result of geological evolutionary processes;

4.1.2."radioactive mineral" means mineral resource concentration contains radioactive isotope of uranium and thorium belongings;

/This sub-paragraph was added according to the law as of July 16, 2009/

4.1.3."reconnaissance" means a geological study conducted through taking rock sample and sampling, using primary mineral information and taking air mapping without affecting subsoil for the purpose of determining whether there is mineral;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.4."geological survey to be conducted at expense of the State budget" means geological mapping, thematic survey, geological prospecting and exploration of minerals to be conducted from the State budget;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.5."mineral prospecting" means a geological survey whose purpose is identifying the existence of mineral accumulation in an area with prospects of mineral resources;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.6."mineral exploration" means geological and exploration survey conducted on and under the earth's surface for the purpose of detailed identification of the location and quantity of mineral accumulation, and conducting a feasibility study on mining such mineral accumulation;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.7."mineral mining" means the entire range of activities that include separating and extracting minerals from land surface and subsoil, ore stockpile, waste or tailings, increasing and concentrating the concentration of its usable contents, producing products, marketing those products, and other activities related therewith;

/Addendum was made to this sub-paragraph according to the law as of July 1, 2014/

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.8."minimum cost of exploration" means a mandatory minimum expenditure to be spent for exploration work in each year;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.9."mineral deposit" means mineral accumulation that has been formed on the surface or in the subsoil resulting from geological evolutionary processes, where the quality and proven reserve is economically feasible to mine by industrial methods;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.10."hard rock mineral deposit" means any mineral accumulation that has been formed as the result of geological evolutionary processes and exists in the same space with its host rock;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.11."placer mineral deposit" means mineral accumulation that has been separated from its original subsoil location as a result of erosion and mechanical processes and that are located as layers after reformation;

4.1.12."mineral deposit of strategic importance" means a deposit whose scope may have a potential impact on national security, national or regional economic and social development, or that is producing or has the potential to produce more than 5% of total annual Gross Domestic Product.

/This sub-paragraph was modified according to the law as of July 1, 2014/

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.13."special purpose territory" means land taken at the national and local levels by an authorized government entity pursuant to Articles 17, 18 and 20 of the Land Law for special public needs where prospecting, exploration and mining are restricted or prohibited:

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.14."reserve area" means an area previously granted under exploration or mining license which is now taken under State control by decision of a competent authority suspending any prospecting, exploration or mining activities;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.15."exploration license" means a document granting the right to prospect or conduct exploration as set forth in this Law;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.16."mining license" means a document granting the right to conduct mining as set forth in this Law;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.17."exploration area" means the area granted under a license as set forth in sub-paragraph 4.1.15 of this Law;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.18."mining area" means the area the area granted under a license as set forth in sub-paragraph 4.1.16. of this Law;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.19."mining claim" means a part of a geological formation overlapping with a mining area and where mining is to be conducted;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.20."license fee" means the payment that a license holder makes as set forth in this Law in order to maintain the license effective;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.21."license holder" means a legal person to whom prospecting, exploration or a mining right has been granted or transferred as set forth in this Law;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.22."legal person" means a company or partnership as set forth in paragraph 33.1 of the Civil Code of Mongolia;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

4.1.23."artisanal mining" means the activity in the land allocated pursuant to the sub-paragraph 16.1.11 of Land Law, carried out by the people established as partnership which is not registered pursuant to paragraph 481.1 of the Civil Code with the purpose of extracting minerals in economically non-profitable deposit with mineral non-productive contents, residual deposit derived in the result of operational and technological waste and in an area with indication;

/This sub-paragraph amended according to the law as of November 10, 2016/

/This sub-paragraph was modified according to the law as of July 1, 2014/

/This sub-paragraph was added according to the law as of July 1, 2010/

4.1.24."mineral resource wealth" means an accumulation of a mineral - the size, form, content, composition or economic importance of which has not been fully assessed;

/This sub-paragraph was added according to the law as of July 1, 2014/

4.1.25."mineral deposit reserve" means a mineral resource – the size, form, content and mineral composition of which has been determined by exploration work, and which is technically and economically viable to extract;

/This sub-paragraph was added according to the law as of July 1, 2014/

4.1.26."technical expert and specialist" means a nationally and internationally-recognized individual who has been accredited by mining and geological non-government organizations;

/This sub-paragraph was added according to the law as of July 1, 2014/

4.1.27."a residual deposit" means ore and mineral stockpiles with a certain mineral content, formed during extraction, processing and concentration, which may be economically profitable, when reprocessed;

/This sub-paragraph was added according to the law as of November 10, 2016/

4.1.28."utilizing a residual deposit" means extracting, processing and concentrating ore and mineral stockpiles specified in sub-paragraph 4.1.27 of this Law to manufacture and sell value-added products, and other relevant operations.

/This sub-paragraph was added according to the law as of November 10, 2016/

Article 5.Ownership of minerals

5.1.Mineral resources naturally occurring on and under the earth's surface in Mongolia are the property of the State. 

5.2.The State, as the owner, has the right to grant prospecting, exploration and mining rights as set forth in the terms and conditions of this Law.

5.3.The percentage of the State share in a minerals deposit shall be established by an agreement on the exploitation of the mineral deposit where State-funded prospecting exploration was used to determine reserves. The percentage of the State share determined by the agreement may be replaced by royalty for mineral deposits of strategic importance.

/Addendum was made to this paragraph according to the law as of February 18, 2015/

5.4.The State may participate up to 50% jointly with a private legal person in the exploitation of a minerals deposit of strategic importance where State-funded exploration was used to determine proven reserves. The percentage of the State share shall be determined by an agreement on exploitation of the deposit, considering the amount of investment made by the State. The percentage of the State share determined by the agreement may be replaced by royalty for mineral deposits of strategic importance.

/Addendum was made to this paragraph according to the law as of February 18, 2015/

/This paragraph was amended according to the law as of January 8, 2009/

5.5.The State may own up to 34% of the shares of an investment to be made by a license holder in a mineral deposit of strategic importance where proven reserves were determined through funding sources other than the State budget. The percentage of the State share shall be determined by an agreement on exploitation of the deposit considering the amount of investment made by the State. The percentage of the State share determined by the agreement may be replaced by royalty for mineral deposits of strategic importance.

/Addendum was made to this paragraph according to the law as of February 18, 2015/

/This paragraph was amended according to the law as of January 8, 2009/

5.6.A legal person holding a mining license for a mineral deposit of strategic importance shall sell no less than 10% of its shares through the Mongolian Stock Exchange.

Article 6.Classification of mineral deposits

6.1.Mineral deposits are classified as follows:

6.1.1.deposits of strategic importance;

6.1.2.deposits of common minerals;

6.1.3.deposits of conventional minerals.

6.2.Mineral deposits set forth in sub-paragraph 6.1.1 of this Law shall refer to a deposit which meets the requirements of sub-paragraph 4.1.12 of this Law.

/This paragraph was amended according to the law as of July 16, 2009/

6.3.Abundant sediments and rock concentration that might be used as construction material are considered common mineral deposits.

6.4.All mineral accumulations except as set forth in paragraphs 6.2 and 6.3 of this Law shall be considered conventional mineral deposits.

Article 7.General requirements of a license holder, for conducting minerals prospecting, exploration and mining operation

7.1.Mineral exploration and mining licenses shall be granted to a legal person duly formed and operating under the laws of Mongolia, and which is a Mongolian taxpayer, by the way of selection procedure unless this law provides otherwise.

/This paragraph was amended according to the law as of November 10, 2017/

7.2.A license holder shall meet the requirements set forth in paragraph 7.1 of this Law for the entire duration of a valid license.

7.3.Conducting prospecting, exploration or mining without a valid license is prohibited except exploring minerals in artisanal mining. Extraction of natural colored and valuable rocks shall be carried out on a license basis same as simple minerals

/This paragraph was modified according to the law as of July 1, 2014/

/This paragraph was amended according to the law as of July 1, 2010/

7.4.One license shall be granted to one legal person only.

7.5.Land owners and possessors may use the commonly distributed minerals in the area for their own household needs without the intention of making a profit, and the list of such minerals shall be approved by the Government.

/This paragraph was revoked according to the law as of January 16, 2014/

7.6.If the State administrative body in charge of nuclear energy matters delivered a notice to the State administrative body in charge of geological and mining matters in order to conduct a selection to issue a license for radioactive minerals prospecting, exploration and mining in accordance with the Law on Nuclear Energy, exploration and mining licenses shall not be issued on the area till the issues are settled. 

/This paragraph was revoked according to the law as of February 13, 2015/

/This paragraph was added according to the law as of July 16, 2009/

CHAPTER TWO

STATE REGULATION IN MINERALS SECTOR

Article 8.The powers of the State Great Khural

8.1.The powers of the State Great Khural with respect to mineral matters are as follows:

8.1.1.establish State policy with respect to the development of the geology and mining sectors;

8.1.2.oversee the Government's implementation of legislation on minerals prospecting, exploration and mining;

8.1.3.resolve matters concerning prospecting, exploration and mining of minerals in areas with State special protection;

8.1.4.approve a mineral deposit as a mineral deposit of strategic importance by proposal and exclusion of the Government or on its own initiative;

/Addendum was made to this sub-paragraph according to the law as of July 1, 2014/

8.1.5.restrict or prohibit prospecting, exploration and mining activities on a particular area, or grants of exploration and mining licenses for certain territories by proposal of the Government at its own initiative;

8.1.6.establish a special regime related to extraction, transportation and storage of radioactive minerals;

/This sub-paragraph was revoked according to the law as of July 1, 2014/

8.1.7.determine the State's percentage ownership of mineral deposits of strategic importance as set forth in paragraphs 5.5 and 5.6 of this Law as proposed by Government or at its own initiative based on the size of the minerals deposit registered in the State Reserve Integrated Registry.

Article 9.The powers of the Government

9.1.The powers of the Government with respect to mineral matters are as follows:

9.1.1.ensure implementation of laws and legislation on prospecting and exploration of minerals and mining;

9.1.2.implement State policy with respect to the development of the geology and mining sectors;

9.1.3.resolve matters concerning prospecting, exploration and mining of minerals on State special purpose territory, exclusive of areas under State special protection;

9.1.4.submit proposals to the State Great Khural for approval and exclusion of a minerals deposit of strategic importance;

/Addendum was made to this sub-paragraph according to the law as of July 1, 2014/

9.1.5.submit proposals to the State Great Khural for determining the State share percentage in a minerals deposit of strategic importance;

9.1.6.resolve matters concerning the source of investment of Mongolia in a joint venture to develop a mineral deposit of strategic importance;

9.1.7.resolve issues or submit proposals to the State Great Khural with regard to setting aside specific areas for reserve or special purpose territory;

9.1.8.participate in mineral prospecting, exploration and mining through a legal entity having State ownership;

9.1.9.establish National Geological Office;

/This sub-paragraph was added according to the law as of July 1, 2014/

9.1.10.approve contract template stated in paragraph 42.1 of this law;

/This sub-paragraph was added according to the law as of July 1, 2014/

9.1.11.determine those areas for which exploration license and the mining license if not stipulated in paragraph 24.1 of this law may be granted by their coordination on the basis of recommendation of the State central administrative body in charge of geology and mining matters, and inform the public;

/This paragraph was amended according to the law as of November 10, 2017/

/This sub-paragraph was added according to the law as of July 1, 2014/

9.1.12.determine the geographic extent of mineral deposits of strategic importance;

/This sub-paragraph was added according to the law as of July 1, 2014/

9.1.13.grant a license (with the agreement of the license holder) for an area of minerals accumulation, and found in the result of the geological research carried out by state budget or for an area set out in paragraph 26.9 of this law as the compensation for the confiscation of licensed area, where such was necessary for national security reasons, for the implementation of large scale government projects or other state purposes;

/This sub-paragraph was amended according to the law as of November 10, 2017/

/This sub-paragraph was added according to the law as of July 1, 2014/

9.1.14.approve the regulation on the issue of mining license of residual deposit;

/This sub-paragraph was added according to the law as of November 10, 2016/

9.1.15.approve the regulation on the use of residual deposit and operational requirement thereof.

/This sub-paragraph was added according to the law as of November 10, 2016/

Article 10.Powers of the State central administrative body

10.1.The powers of the State central administrative body in charge of geology and mining matters are as follows:

10.1.1.develop and implement State policy with respect to the development of the geology and mining sectors;

10.1.2.upon authorization by the Government, approve of the tender procedures set forth in paragraphs 20.1, 24.2, 26.9 and 60.9 of this Law;

/This sub-paragraph was amended according to the law as of November 10, 2017/

10.1.3.ensure enforcement of legislation on minerals and resolutions of the Government with regard to implementation of such legislation;

10.1.4.determine service fee rates for submitting an license application, transferring a license, extending the term of a license, pledging a license, transferring a license pursuant to a pledge, or surrendering all or part of a licensed area, resolving boundary disputes and reviewing exploration work plans, information and reports;

10.1.5.approve the budget for state-funded geological studies and review the results of the same;

/This sub-paragraph was modified according to the law as of July 1, 2014/

10.1.6.approve procedures for funding, implementing and assessing results of geological studies to be funded by the State budget;

10.1.7.approve procedures with regard to prospecting, exploration and mining activities, and develop and approve product standards;

10.1.8.oversee operations with respect to the development of strategic deposits;

10.1.9.establish a Mineral Resources Professional Council with professional officers in charge of making conclusion and issuing recommendations on reports of geological studies conducted within the territory of Mongolia and a feasibility study for mineral deposit mining and concentration plants and approve its charter and methodology to calculate experts' salary;

/This sub-paragraph was modified according to the law as of July 1, 2014/

10.1.10.ensure transparency in mineral exploration, exploitation, production and sales;

/This sub-paragraph was added according to the law as of January 24, 2014/

10.1.11.approve the procedure for acceptance of mines and mining/concentrating plants into operation;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.12.approve approving the requirements and operational procedures of concentrating plants;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.13.establish an ad hoc policy council mandated to provide recommendations and support the implementation of state policy in relation to the mineral sector and ensures equity of representatives of state organizations, investors, professional associations and non-governmental organizations, and approve its working rule and organizational structure;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.14.approve the restoration and closing procedures of mines and mining/concentration plants in cooperation with the State central administrative body in charge of environmental matters;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.15.approve the regulations governing the geological, mining and mineral resources information database;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.16.approve the regulations for the accrediting of geology and mining sector technical experts and specialists by non-governmental organizations;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.17.approve the classifications of mineral resources and deposit reserves;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.18.approve the procedures governing the public disclosure of mineral resources, deposit reserves and the results of prospecting work;

/This sub-paragraph was added according to the law as of July 1, 2014/

10.1.19.the state control over the implementation of laws and regulations on minerals and the activities of prospecting, exploring, and exploiting minerals shall be performed by the State central administrative body in charge of geology and mining matters and an authorized organization for inspection.

/This sub-paragraph was added according to the law as of November 11, 2022, and it shall be enforced from January 1, 2023/

Article 11.Obligations of the State administrative body

11.1.The State administrative body in charge of geology and mining matters (hereinafter referred to as "State administrative body" in this law) shall have the following duties:

11.1.1.to carry out regional geological, geochemical, hydrogeological mapping and geophysical research on the territory of Mongolia;

/This sub-paragraph was revoked according to the law as of July 1, 2014/

11.1.2.to conduct a study of the pattern and shape of the distribution of minerals in the territory of Mongolia and providing an assessment of mineral resources;

/This sub-paragraph was revoked according to the law as of July 1, 2014/

11.1.3.to carry out geo-ecological research and evaluate the impact of natural factors and human activities on all spheres of economy and society;

/This sub-paragraph was revoked according to the law as of July 1, 2014/

11.1.4.to deliver geological and mining information, other than classified information, to interested parties, information provided by the license holder in accordance with this law;

/This sub-paragraph was revoked according to the law as of July 1, 2014/

11.1.5.to maintain and update the information database with respect to geological and related mineral resources;

/This sub-paragraph was amended according to the law as of November 10, 2017/

11.1.6.to monitor the plan, reports and the minimum cost of exploration of the exploration license holder as provided in this Law;

11.1.7.to receive, register and resolve requests regarding mineral reconnaissance;

11.1.8.to provide evaluations and recommendations with respect to technology and equipment used in the mining industry, and implement mining technology policy;

11.1.9.to create a favorable investment environment for the mining sector and provide evaluations with respect to the emerging investment environment;

11.1.10.to conduct research, evaluation and provide recommendations regarding the impact the mining industry has on the social and economic development of Mongolia;

11.1.11.to conduct research on supply and demand and the prices of mining products, and forecast long-term trends;

11.1.12.to submit proposals regarding state policies on particular mining projects and the implementation of those polices;

11.1.13.to organize a tender to issue a license and provide a recommendation on allocating an area for common minerals;

/This sub-paragraph was amended according to the law as of November 10, 2017/

/Addendum was made to this sub-paragraph according to the law as of July 1, 2014/

11.1.14.to monitor activities related to exploration and mining licenses;

11.1.15.to provide the public with access to the processes of issuing and reissuing licenses, license revocation, transfer, pledge and surrender of licenses for the entire or a part of the licensed area

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

11.1.16.to receive, register and make decisions with respect to applications for minerals exploration and mining licenses selection process;

/This sub-paragraph was amended according to the law as of November 10, 2017/

/This sub-paragraph was amended according to the law as of November 10, 2017/

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

11.1.17.to maintain the registry of licenses;

11.1.18.to maintain the cartographic registry of licenses;

11.1.19.to issue exploration and mining licenses of minerals other than common minerals;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of January 9, 2014/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

11.1.20.to collect application processing and license fees of minerals other than common mineral;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of January 9, 2014/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

11.1.21.to review and resolve boundary disputes between and among license holders;

11.1.22.to provide interested persons with access to the registry and the cartographic registry license, and to notify relevant state bodies and to publish official notices informing the public of changes to the registries.

11.1.23.to receive an application lodged by Governor of soum or district according to sub-paragraph 12.1.5 of this Law and to provide recommendations regarding whether restricted or prohibited prospecting, exploration and mining activities on the particular area or taken back for special needs or resources, while entire or a part of the valid licensed area overlapped and to determine land size and boundary;

/This sub-paragraph was added according to the law as of July 1, 2010/

11.1.24.to maintain a separate register of those license holders which are listed on a stock exchange;

/This sub-paragraph was added according to the law as of July 1, 2014/

11.1.25.to determine and approve the coordinates of areas on which exploration and mining licenses may be issued.

/This sub-paragraph was modified according to the law as of November 10, 2017/

/This sub-paragraph was added according to the law as of July 1, 2014/

11.2.The unit of state administrative body in charge of geological matters shall be responsible for issues set forth in sub-paragraphs 11.1.1-11.1.7, the unit in charge of mining matters shall be responsible for issues set forth in sub-paragraphs 11.1.8-11.1.12 and the unit in charge of cadastre shall be responsible for issues set forth in sub-paragraphs 11.1.13-11.1.23.

/This sub-paragraph was amended according to the law as of July 1, 2010/

11.3.Professional inspection agency shall implement state control of mineral prospecting, exploration, mining activities and implementation of the Minerals Law of Mongolia and legislation.

/This paragraph was revoked according to the law as of November 11, 2022, and shall be enforced from January 1, 2023/

/This sub-paragraph was added according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

Article 111.Functions of National Geological Office

111.1.Mongolian National Geological Office shall undertake the following obligations;

111.1.1.to conduct geological cartographic, geophysics, geochemical and hydrogeological and geo-ecological mapping and research on the territory of Mongolia;

111.1.2.to research patterns of distribution and occurrence of mineral resources and provide an assessment of such resources;

111.1.3.to create and expand national geology, mineral resource database and provide interested persons with information other than confidential information;

/This sub-paragraph was amended according to the law as of November 10, 2017/

111.1.4.to maintain a national database on geological, mining and mineral resources and record changes in minerals reserves.

/Above-mentioned Article 111 was amended according to the law as of July 1, 2014/

Article 12.Full power of local administrative and self-governing bodies

/The title of this Article was amended according to the law as of April 22, 2022/

12.1.Local administrative and self-governing bodies shall implement the following with regard to mineral matters:

/This paragraph was amended according to the law as of April 22, 2022/

12.1.1.enforce implementation of this Law and regulations of higher administrative bodies in their respective territories;

12.1.2.permit use of the license area for the purposes set forth in the licenses, and halt any violations;

12.1.3.monitor compliance by license holders of their obligations with respect to environmental rehabilitation, health and safety regulations for workers and local residents, and the payment of their obligations to the treasuries of local administrative bodies;

12.1.4.adopt resolutions on establishing local special purpose territory as set forth in the grounds and regulations provided by the Land Law;

12.1.5.request the State administrative body to provide recommendation as set forth in sub-paragraph 11.1.23 of this law regarding the land allocated for designation specified in sub-paragraph 16.1.11 of Law on Land.

/This sub-paragraph was added according to the law as of July 1, 2010/

12.2.The Governor of soum shall exercise the following powers in matters of minerals:

/This paragraph was added according to the law as of April 22, 2022/

12.2.1.monitor the operation of mineral extraction by small-scale mining;

/This sub-paragraph was added according to the law as of April 22, 2022/

12.2.2.inform the public annually about the decisions that are being implemented regarding the sector of mineral resources in the jurisdiction;

/This sub-paragraph was added according to the law as of April 22, 2022/

12.2.3.organize the implementation of the procedure for spending funds concentrated from foreign labor in the fields of culture, education, and health, specified in paragraph 43.3 of this law;

/This sub-paragraph was added according to the law as of April 22, 2022/

12.2.4.ensure the implementation of the contract for extraction of minerals by small-scale mining, and submit information about the conclusion of contract to the state administrative body;

/This sub-paragraph was added according to the law as of April 22, 2022/

12.2.5.review of environmental management plans for mineral exploration licenses.

/This sub-paragraph was added according to the law as of April 22, 2022/

Article 13.Reserved areas

13.1.Areas licensed for exploration and mining may be established as reserve areas by a decision of the Government for the following purposes:

13.1.1.to put in order the registry of licenses;

13.1.2.to resolve boundary disputes among license holders;

13.1.3.to conduct geological mapping, prospecting and exploration of minerals through the state budget funding.

13.2.A decision to establish a reserve area as set forth in paragraph 13.1 of this Law shall be made by official public notice and contain the following information:

13.2.1.the name of the aimag or capital city and soum or district where the reserve area is located;

13.2.2.the coordinates of the reserve area;

13.2.3.the purpose for reserving the area;

13.2.4.the time period the area shall be reserved.

13.3.The State administrative body shall record the reserve area as set forth in paragraph 13.1 of this Law in the licensing and cartographic registries.

13.4.A reserve area shall be released for the following reasons:

13.4.1.a decision by the Government to release the reserve area prior to expiration of the original term;

13.4.2.expiration of the term for which the reserve area had been reserved;

13.4.3.after settlement of the circumstances set forth in sub-paragraphs 13.1.1-13.1.3.

13.5.If the reserved area is released on the grounds set forth in paragraph 13.4 of this Law, the rights and liabilities of the license holder shall remain in effect for the period of reservation.

Article 14.Special purpose territory with restrictions and prohibitions on prospecting, exploration and mining activities

14.1.In the event that a competent agency issues a resolution to establish a special purpose territory, a written notice containing the following information shall be delivered to the State administrative agency within ten (10) business days:

14.1.1.the name of the aimag and soum where the territory is located;

14.1.2.the coordinates of the land where the special purpose territory is established;

14.1.3.the purpose for which the land has been taken for special purpose;

14.1.4.the time period for which the land shall be used for special purpose.

14.2.The time period, for special purpose territories, shall not be less than five (5) years.

14.3.The State administrative body shall record the coordinates of the special purpose territory in the exploration license, mining license and cartographic registries.

14.4.If establishment of a special purpose territory overlaps entirely or in part with a territory covered by a valid license, and prohibits further exploration or mining in the overlapping area, the authority whose decision it was to establish the special purpose territory shall be obligated to compensate the license holder within a year.

/This paragraph was amended according to the law as of July 1, 2014/

14.5.The amount of the compensation and time for payment set forth in paragraph 14.4 shall be negotiated and agreed by the authority that decided to establish the special purpose territory and the affected license holder. If the parties fail to reach an agreement, the amount of compensation and time for payment shall be determined by the State administrative body based on conclusion of an authorized independent body.

14.6.The license holder shall have the right to resume its activities if the compensation is not paid in the time set forth in paragraph 14.5 of this law.

14.7.Disputes related to compensation stated in paragraph 14.5 of this law shall be resolved by a court.

14.8.Within one (1) month after the State administrative body gives public notice of the expiration for special purpose territory specified in paragraph 14.2 of this law, the legal person that previously held the specific area under the exploration of mining license shall, after submitting a request, have an exclusive right to reacquire the exploration or mining license.

14.9.In accordance with paragraphs 13.5 and 14.8 of this law, when the person who previously held a license for exploration and exploitation continues to own the vacated area, the period of the license shall be extended by the period of special needs and reserves.

/This paragraph was added according to the law as of July 1, 2014/

CHAPTER THREE

PROSPECTING AND EXPLORATION OF MINERALS

Article 15.Reconnaissance

15.1.A legal person may conduct reconnaissance for minerals in in the territory of Mongolia without a license, provided that the legal person notifies the State and local administrative bodies in advance, registers its name and address, the area and its location where it proposes to conduct reconnaissance.

/This paragraph was amended according to the law as of July 1, 2014/

/This paragraph was amended according to the law as of January 8, 2009/

15.2.Disturbing the subsoil while conducting reconnaissance is prohibited and any person proposing to conduct reconnaissance shall obtain permission to enter the land from the landowners, land-possessors or land-users.

Article 16.Geological survey and research work to be conducted with the state budget funding

16.1.The state-funded geological survey and research work shall be conducted without a license.

16.2.Geological surveys whose purpose is to identify geological setting, mineral distribution and areas with prospects of mineral accumulation shall be conducted using scientific methods and methodologies according to a set schedule.

16.3.Prospecting of minerals with the state budget funding shall be conducted in a comprehensive manner.

16.4.Information regarding the state-funded exploration shall be maintained in a state database that is open to the public.

16.5.The state-funded research work and geological survey may be conducted in special purpose territory, and no fee shall be paid.

16.6.The State central administrative body in charge of geology and mining matters shall approve regulations on financing, implementing, monitoring and receiving results of the state-funded geological survey as set forth in this Law.

Article 17.Separate the area for the selection of exploration license area

17.1.In accordance with sub-paragraph 11.1.25 of this Law, the State administrative body shall give a written notice along with the area map to the Governor of an aimag or the capital city when determining the coordinates of the area.

17.2.Within forty-five (45) days of receiving the notice set forth in paragraph 17.1, the Governor of the aimag or the capital city shall respond to the State administrative body after consultation with the Citizens` Representatives` Khural of soum or district and the Citizens` Representatives` Khural of aimag or the capital city in which the area is located. Failure to respond shall be deemed as approved. The Governor of aimag or the capital city may refuse the granting of an exploration license on grounds provided in the laws of Mongolia.

/This paragraph was amended according to the law as of April 22, 2022/

17.3.The Government shall approve the coordinates of the area on which exploration license will be issued, based on the approval specified in paragraph 17.2 and a proposal from the State administrative body in charge of geological and mining matters.

17.4.The State administrative body shall select areas for exploration licenses and make tender announcement to the public thirty (30) days prior to the tender via national daily newspapers and other press and media, within the framework of the coordinates of the area approved by the Government in accordance with paragraph 17.3 of this Law. 

17.5.The selected area specified in paragraph 17.4 of this Law shall meet following requirements:

17.5.1.it shall be quadi-lateral in shape and its borders shall be straight lines overlapping with directions along longitude and latitude;

17.5.2.it shall not overlap with a reserve area or a special purpose territory or an area prohibited from exploration and mining;

17.5.3.it shall not overlap with an area with a valid license.

17.6.The borders of area specified in the application may deviate from straight lines in order to avoid overlapping set forth in sub-paragraphs 17.5.2 and 17.5.3 where it is a:

17.6.1.national border;

17.6.2.reserve area;

17.6.3.special purpose territory and areas prohibited from exploration and mining;

17.6.4.licensed area granted before this Law became effective having a shape and position other than as provided under this Law;

17.6.5.other natural formations such as lakes, ponds that are considered impossible to in the exploration area.

17.7.The size of an exploration area of one license shall not be less than twenty-five (25) hectares and shall not exceed one hundred fifty thousand (150 000) hectares.

/This Article was modified according to the law as of November 10, 2017/

Article 18.Procedures for applying for and registering exploration license selection

/This Article was modified according to the law as of November 10, 2017/

18.1.The legal entity specified in paragraph 7.1 of this Law shall submit an application for tender to issue exploration license to the State administrative body as specified in sub-paragraph 10.1.2 of this Law, and following documents shall be attached:

18.1.1.the applicant's name, postal address, phone and fax numbers and e-mail address;

18.1.2.notarized copy of the applicant's State Registration Certificate;

18.1.3.service fee receipt;

18.1.4.information on adequate professional personnel, technique and equipment and a technical proposal including the type, scope, period and cost of exploration work, environmental protection project and relevant cost, budget and other relevant documents;

18.1.5.price quotation developed in accordance with the form approved by the State administrative body, which is sealed for delivery;

18.1.6.taxpayer reference from the Tax Authority of Mongolia;

18.1.7.other required documents specified in sub-paragraph 10.1.2 of this Law.

18.2.Immediately following the receipt of an application specified in paragraph 18.1 of this Law, the State administrative body shall carry out the following:

18.2.1.register the application in the application registry and record the registration number, date, hour and minute of registration and issue a receipt acknowledging the filing of the application to the applicant

18.2.2.mark the first and last registered application of that day.

/This Article was modified according to the law as of November 10, 2017/

Article 19.Registering and processing of the application

19.1.After review of the application set forth in paragraph 18.2 of this Law the State administrative agency shall carry out the following:

19.1.1.register the application in the application registry and record the number, date, hour and minute of registration on each page attached to the application and issue the applicant a receipt acknowledging the filing of the application;

19.1.2.record the first and last registered application of that day;

19.1.3.immediately following the registration it shall be determined by preliminary screening whether the application and the attached documents meet the requirements specified under paragraphs 17.1, 17.2 and 18.2 of this Law;

19.1.4.following the preliminary screening set forth in sub-paragraph 19.1.3 of this Law, it shall be determined whether the requested exploration area overlaps with an area with restrictions or prohibitions on mineral prospecting, exploration or mining, reserve area, special purpose territory, or any area subject to an existing valid license or previously filed pending application for a license.

19.2.After completing the actions set forth in paragraph 19.1 of this Law within twenty (20) business days after registration of the application, the State administrative agency shall make one of the following decisions:

19.2.1.reject the request and give written notice to the applicant containing the grounds for such decision if the application and attached documents fail to meet the requirements of paragraphs 17.1, 17.2 and 18.2 of this Law, and record it in the application registration book;

19.2.2.notify the applicant that the requested area is available for issue under an exploration license, if the requested area does not overlap with any part of the areas set forth in sub-paragraph 19.1.4;

19.2.3.notify the applicant in writing that the application is rejected, if the requested area overlaps completely or partially with an area with restrictions or prohibitions on mineral prospecting, exploration or mining, special purpose territory, reserve area, or an area subject to an existing valid license, and record the decision in the application registration book;

19.2.4.notify the applicant in writing that the application is rejected, if the requested area overlaps completely with an area already requested in a pending application, and record the decision in the application registration book;

19.2.5.notify the applicant that the exploration license may be granted for the part of the requested area which does not overlap, if the requested area partially overlaps with an area already requested in a pending application. Another application shall be submitted if the applicant wishes to obtain an exploration license for the area.

19.3.The State administrative body shall give written notice to the Governor of an aimag or the capital city if it contemplates granting a license as set forth in sub-paragraphs 19.2.2 and 19.2.5 of this Law. An area map prepared as set forth in paragraph 17.1 of this Law shall be attached to the written notice.

19.4.Within thirty (30) days of receiving the notice set forth in paragraph 19.3 the Governor of the aimag or the capital city shall respond to the State administrative agency after consultation with the Citizens` Representatives` Khural of the soum or district and the Presidium of the Citizens` Representatives` Khural of the aimag or district. Failure to respond as set forth in this Article shall be deemed as approval.

19.5.The Governor of the aimag or capital city may refuse the granting of an exploration license only on grounds provided in the laws of Mongolia.

19.6.If the Governor of the aimag or capital city supports the decisions set forth in sub-paragraphs 19.2.2 and 19.2.5 of this Law, the State administrative agency shall make a decision to grant the area under an exploration license and notify the applicant that the license fee for the first year shall be paid within the period set forth in paragraph 34.1 of this Law.

19.7.If the applicant fails to obtain the license within one (1) month of the decision set forth in paragraph 19.6 of this Law, or fails to pay the first year's license fee within the period set forth in paragraph 34.1 of this Law, the State administrative agency shall remove the application from the registry and notify the applicant of this action recording its action in the application registration book.

19.8.Within three (3) business days after the payment is made for the first year's license fee the State administrative agency shall issue an exploration license for a three (3) year period, and record the exploration license and the area in the license and license cartographic registries.

19.9.An exploration license shall contain the date of issuance, the license holder's name, the coordinates of the area covered by the license and an attachment where all subsequent changes regarding the license shall be recorded.

19.10.Immediately following the grant of an exploration license, the State administrative agency shall notify the State central administrative body in charge of the environmental matters, governors of the aimag, soum or district where the licensed area is located, State professional inspection agency, and it shall be published by official notice in a daily newspaper.

19.11.The State administrative body shall return the application and attached documents to the applicant if the decisions set forth in sub-paragraphs 19.2.1, 19.2.3, 19.2.4, and 19.7 of this Law are made.

19.12.An exploration license for an area with mineral accumulation determined through State-funded geological survey work shall be granted through tender.

/This Article was revoked according to the law as of November 10, 2017/

Article 20.Organizing a tender to issue exploration licenses and issuing the license

20.1.The State administrative body shall organize a tender to issue exploration license as specified in sub-paragraph 10.1.2 of this Law and shall perform one of the following:

20.1.1.evaluate technical proposal and price quotation of the applicant as specified in sub-paragraph 10.1.2 and inform the possibility of issuing the license to the applicant with the highest rating;

20.1.2.if two or more applicants have the same rating, inform the possibility of issuing the license to the applicant who was first to be registered;

20.1.3.if the application and its attached documents fail to meet the requirements in paragraph 18.1 of this Law, grounds and reasons for ineligibility shall be delivered to the applicant along with the documents attached to the application.

20.2.If no bid is submitted for the tender, announced as set forth in paragraph 20.1 of this Law, the tender may be announced again.

20.3.If exploration license can be issued in accordance with sub-paragraphs 20.1.1 and 20.1.2 of this Law, a notice to pay bid price, threshold price difference and the annual fee of the exploration license for the first year within the period specified in paragraph 34.1 of this Law shall be delivered to the selected applicant.

20.4.If the applicant informed its inability to receive the license within the term specified in paragraph 34.1 of this Law after the delivery date of the notice as specified in paragraph 20.3 of this Law or failed to pay the bid price, threshold price difference and the annual fee for the first year, the State administrative body shall invalidate the notice specified in sub-paragraphs 20.1.1 and 20.1.2 and inform the applicant in writing.

20.5.If the selected legal entity pays the first annual payment within the term specified in paragraph 34.1 of this Law, the State administrative body shall issue the exploration license within 3 business days and register the exploration license and licensed area in the license and license cartographic registries.

20.6.An exploration license shall contain the date of issuance, the license holder's name, and coordinates of the area covered by the license and an attachment where all subsequent changes regarding the license shall be recorded.

20.7.Immediately following the grant of an exploration license, the state administrative body shall notify the State central administrative body in charge of the environmental matters, and the Governors of aimag, soum or district, and the Taxation agency where the licensed area is located, and it shall be published in a daily newspaper.

/In this paragraph, the term "professional inspection" was changed to "taxation" by the law dated November 11, 2022, and it shall be enforced from January 1, 2023/

/This Article was modified according to the law as of November 10, 2017/

Article 21.Rights of exploration license holders 

21.1.An exploration license holder shall have the following rights:

21.1.1.to conduct exploration for minerals within the boundaries of an exploration area;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

21.1.2.to conduct exploration for radioactive minerals within the boundaries of an exploration area on a basis of a license issued by State Administrative Agency in charge of nuclear energy issues;

/This sub-paragraph was revoked according to the law as of February 13, 2015/

/This sub-paragraph was added according to the law as of July 16, 2009/

21.1.3.to obtain a mining license for minerals according to its exclusive right for any part of an exploration area upon fulfilling the terms and conditions of this Law;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009, and the numbering was changed/

21.1.4.to transfer the exploration license for minerals under the terms and conditions of this Law, or surrender all or part of the exploration license area with permission and under supervision of the respective authority;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009, and the numbering was changed/

21.1.5.to obtain three (3) extensions of the term of an exploration license for minerals except radioactive minerals for three (3) years each upon fulfilling the terms and conditions of this Law;

/This sub-paragraph was amended according to the law as of July 1, 2014/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009, and the numbering was changed/

21.1.6.to access the exploration area and construct temporary structures with the purpose of conducting exploration work;

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009, and the numbering was changed/

21.1.7.to pass through the land surrounding the exploration area for the purpose of entering the exploration area;

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009, and the numbering was changed/

21.1.8.to exercise the rights provided by this Law to entering and pass through the land owned or possessed by other persons as approved by the owner or possessor of the land;

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009, and the numbering was changed/

Article 22.Extension of the term of an exploration license

22.1.One (1) month prior to the expiration of an exploration license, the license holder may apply for an extension of the license by submitting an application to the State administrative agency. The following documents shall be attached to the application:

22.1.1.a copy of the exploration license /competent person receiving the documents shall check the documents against the originals and record that the copies are true for free/ if delivered by post, a notarized copy;

 /This sub-paragraph was modified according to the law as of February 10, 2011/

22.1.2.receipts for payments of annual license fees, and service fees and a document proving that the expenditures for exploration work conducted are no less than the minimum cost of exploration;

22.1.3.document proving the renewed approval of the environmental management plan as set forth in Article 40 of this Law;

/This sub-paragraph was amended according to the law as of May 17, 2012/

22.1.4.a report on exploration work completed up to the time of application, and documentation its acceptance.

22.2.Within ten (10) business days following the receipt of an application for extension as set forth in paragraph 22.1 of this Law, the State administrative body shall review the license holder's compliance with the terms and conditions and requirements of paragraph 7.2 and Article 31. If there are no violations the license term shall be extended for the period set forth in sub-paragraph 21.1.5 of this Law, and shall be recorded in the license registry book.

/This paragraph was amended according to the law as of July 16, 2009/

22.3.Immediately following the extension of an exploration license, the State administrative body shall notify the Taxation agency and publicize the extension in a daily newspaper.

/In this paragraph, the term "professional inspection" was changed to "taxation" by the law of November 11, 2022, and it shall be enforced from January 1, 2023/

22.4.The State administrative body shall refuse the extension of the license if a license holder fails to meet the requirements of paragraph 7.2 and Article 31 of this Law, and will notify the applicant in writing, and record it in the license registry. 

Article 23.Pre-mining operation

23.1.Pre-mining operation is the period after exploration is completed and the mineral deposit reserve is registered with State registration office where the design packages, feasibility study, mine development and commencement of production occurs.

23.2.The commencement period for the mining of the mineral deposit or mine development period shall not exceed 3 years after expiration of the exploration license.

23.3.Pre-mining operations shall be regulated by a pre-mining agreement concluded between the exploration license holder and the State administrative agency.

23.4.The license holder shall pay exploration license fees for the seventh to ninth years of the term as set forth in paragraph 32.2 of this Law, and within the period set forth in paragraph 23.2 of this Law.

/This Article was revoked according to the law as of July 1, 2014/

CHAPTER FOUR

MINERALS MINING

Article 24.Requirements for obtaining a mining license

24.1.Only the exploration license holder is entitled to apply for a mining license in the exploration licensed area.

24.2.Procedure specified in Article 18 and paragraph 20.1 shall be equally complied, when issuing mining license in cases other than specified in paragraph 24.1 of this Law.

/This paragraph was modified according to the law as of November 10, 2017/

24.3.The application for a mining license set forth in paragraph 24.1 shall contain the coordinates of all corners of the requested mining area in degrees, minutes and seconds on a standard map approved by the State administrative body, and the map shall be attached to the application.

/This paragraph was amended according to the law as of November 10, 2017/

24.4.The requested mining area shall meet the following requirements:

24.4.1.shall have the shape of a polygon with borders that are straight lines, not less than 500 meters in length, oriented north-south and east-west;

24.4.2.shall not overlap with a reserve area, special purpose territory, prohibited area to exploration and mining or an area under an existing valid license;

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

24.4.3.for salt and common minerals deposit, the area size shall be not less than 100 meter length in each side;

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

24.5.The borders of a mining license area may deviate from straight lines in order to avoid overlapping set forth in sub-paragraph 24.4.2 where it is a:

24.5.1.national border;

24.5.2.reserve area;

24.5.3.special purpose territory and prohibited area to exploration and mining; /Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

24.5.4.a license area granted before this law because effective having a shape and location that do not conform with the requirements of this Law;

24.5.5.lakes, ponds and other natural formations that may be excluded from the mining area.

Article 25.Procedure for submitting application requesting mining license

25.1.Using the approved form, an applicant for a mining license shall submit an application as set forth in paragraph 24.1 of this Law to the State administrative body. The following documents shall be attached to the application:

/This paragraph was amended according to the law as of November 10, 2017/

25.1.1.the applicant's name, mailing address for official postal address, phone and fax numbers, e-mail address and a reference containing the name of the officer authorized to make decisions;

/Addendum was made to this sub-paragraph according to the law as of July 1, 2014)

25.1.2.a document certifying that the applicant meets the requirements of paragraph 7.1 of this Law;

25.1.3.a map of the area prepared as set forth in the requirements of paragraph 24.3 of this Law. The map shall contain the name of the aimag or capital city and soum or district in which the area is located;

25.1.4.a document showing that the applicant has paid the service fee set forth in sub-paragraph 10.1.4 of this Law;

25.1.5.the Mineral Resources Professional Council's notes on its discussion of the exploration results, and a decision of the State administrative body;

25.1.6.verification of performance of the duties with regard to the environmental management plan during exploration work;

/This sub-paragraph amended according to the law as of May 17, 2012/

25.1.7.an evaluation of the environmental impacts;

25.1.8.a decision by the official or the organization that conducted the tender as set forth in paragraph 24.2 of this Law for the license areas explored with State budget funding.

Article 26.Registering and processing the application

26.1.Upon receiving the application as set forth in paragraph 25.1 of this Law, the State administrative body shall carry out the following:

26.1.1.register the application in the application registry and record the number, date, hour and minute of registration on each page attached, and issue a receipt to the applicant acknowledging the registration of the application;

26.1.2.immediately following the registration it shall be determined by preliminary screening whether the application and the attached documents meet the requirements set forth in paragraphs 24.3, 24.4 and 25.1 of this Law.

26.2.Following the preliminary screening set forth in sub-paragraph 26.1.2 of this Law, the following shall be clarified:

26.2.1.whether the mining area requested by the exploration license holder is within the boundaries of its exploration licensed area;

26.2.2.whether the requested area overlaps with any reserve area, special purpose territory, prohibited area to exploration and mining or an area already subject to an existing valid license;

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

26.2.3.whether the size and evaluation of the mineral reserve estimated by exploration would be sufficient for rehabilitation of environmental damages that might result from mining activities.

26.3.Within twenty (20) business days following the registration of an application for a mining license, the State administrative body shall make one of the following decisions based on the clarifications set forth in paragraphs 26.1 and 26.2, and will notify the applicant accordingly:

26.3.1.reject the request and give written notice to the applicant containing the grounds for such decision if the application and attached documents fail to meet the requirements of paragraphs 24.3, 24.4 and 25.1 of this Law, and record it in the application registration book;

26.3.2.grant the mining license according to the exclusive rights of the applicant where the existing exploration license holder submits an application for a mining license in the exploration area and pays the first year's license fee as set forth in paragraph 34.1 of this Law;

26.3.3.grant the mining license if it does not overlap with any part of an area with restrictions or prohibitions on prospecting, exploration or mining, reserve area, special purpose territory or any area subject to a valid license, and the applicant pays the first year's license fee on time as set forth in paragraph 34.1 of this Law;

26.3.4.if the requested area overlaps in any way with an area set forth in sub-paragraph 26.3.3 of this Law the application for the mining license shall be rejected and written notice containing grounds for such rejection shall be issued to the applicant. This shall be recorded in the application registration book;

26.4.If the applicant who has received a mining license approval notice as set forth in sub-paragraphs 26.3.2 and 26.3.3 of this Law fails to pay the first year's license fee within the period set forth in paragraph 34.1 of this Law, the State administrative agency shall remove the application from the application registry, notify the applicant in writing, and record it in the application registration book.

26.5.Within three (3) business days following the payment of the license fee for the first year made by applicant as set forth in sub-paragraphs 26.3.2 and 26.3.3 of this Law, the State administrative body shall issue a mining license to the applicant for a term of thirty (30) years, and shall register the license and mining area in the license and license cartographic registries.

26.6.A mining license shall contain the date of issuance, the license holder's name, address and the coordinates of the corners of the mine area covered by the license and an attachment in which all subsequent changes with respect to the license shall be recorded.

26.7.Within seven (7) business days following the issuance of a mining license and license for residual deposit the State administrative agency shall notify the State central administrative body in charge of the environmental matters, the State administrative body in charge of taxation and fiscal matters, the Governors of the aimag, soum and district where the licensed area is located, and publish an official notice in a daily newspaper informing the public of the granting of the license.

/The words "the Governors of the aimag, soum and district … and the state professional inspection agency" in this paragraph were changed to "Governors of the aimag, soum and district" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

/Addendum was made to this paragraph according to the law as of November 10, 2016/

26.8.The State administrative body shall return the application and attached documents to the applicant if the decisions set forth in sub-paragraphs 26.3.1, 26.3.4 and paragraph 26.4 of this Law are made.

26.9.A mining license for the area explored and the reserve determined through State budget funding shall be granted through tender.

26.10.If a license holder has a third party utilize the residual deposit, an agreement to utilize the residual deposit shall be executed with the third party and the State administrative body in charge of geological and mining matters shall be informed within 14 days.

/This paragraph was added according to the law as of November 10, 2016/

26.11.The State administrative body shall issue a 3-year license to utilize the residual deposit based on the conclusion and decision by the Mineral Resources Professional Council on the agreement specified in paragraph 26.10 of this Law and the Feasibility Study to utilize the residual deposit.

/This paragraph was added according to the law as of November 10, 2016/

26.12.Mining license holder shall register its land use right in the state register of right in accordance with the Law on State Register of Property Right.

/This paragraph was added according to the law as of June 21, 2018/

Article 27.Rights and obligations of mining license holders

27.1.A mining license holder shall have the following rights and obligations:

27.1.1.the right to use minerals within the mining claim as set forth in the provisions of this Law;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as of July 16, 2009/

27.1.2.the right to use radioactive minerals within the mining claim on the basis of a license issued by state administrative body in charge of nuclear energy matters; 

/This sub-paragraph was revoked according to the law as of February 13, 2015/

/This sub-paragraph was added according to the law as of July 16, 2009/

27.1.3.to fulfill obligations set forth in Chapter 6 of this Law;

/The numbering of this sub-paragraph was changed according to the law as of July 16, 2009/

27.1.4.a mining license holder and legal entity authorized to export shall sell mineral products and minerals extracted from the mining claim at international market prices;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/This sub-paragraph was amended according to the law as of July 1, 2014/

/Addendum was made to this sub-paragraph according to the law as July 16, 2009, and the numbering of this sub-paragraph was changed/

27.1.5.the right to conduct exploration for minerals within the mining area;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as July 16, 2009, and the numbering of this sub-paragraph was changed/

27.1.6.the right to transfer and pledge all or part of the mining license as set forth in provisions of this Law;

/This sub-paragraph was amended according to the law as of February 13, 2015/

/Addendum was made to this sub-paragraph according to the law as July 16, 2009, and the numbering of this sub-paragraph was changed/

27.1.7.the right to extend the term of the mining license other than radioactive minerals two times for a period of twenty (20) years each depending up on the reserve of the mineral;

/The numbering of this sub-paragraph was changed according to the law as July 16, 2009/

27.1.8.the right to enter and pass through the mining area, construct necessary structures and use the mining area in order to carry out mining activities;

/The numbering of this sub-paragraph was changed according to the law as July 16, 2009/

27.1.9.the right to pass through the land adjacent to the mining area;

/The numbering of this sub-paragraph was changed according to the law as July 16, 2009/

27.1.10.to enter and pass through the land owned or possessed by other persons as approved by the owner or possessor of the land in order to exercise the rights provided by this Law;

/The numbering of this sub-paragraph was changed according to the law as July 16, 2009/

27.1.11.the right to use land and water in compliance with applicable laws.

/The numbering of this sub-paragraph was changed according to the law as July 16, 2009/

27.1.12.ensure that feasibility studies stated in sub-paragraph 48.6.1 of this law include detailed information on the transportation of mining products, development of infrastructure and funds required for mine restoration and closure work;

/This sub-paragraph was added according to the law as of July 1, 2014/

27.1.13.appoint a full time employee responsible for reporting on environmental, restoration and mine closure matters to the State Administrative Authority in charge of geology and mining matters on a regular basis;

/This sub-paragraph was added according to the law as of July 1, 2014/

27.1.14.duly register the right to use land in the state register of right in accordance with the Law on State Register of Property Right.

/This sub-paragraph was added according to the law as of June 21, 2018/

Article 28.Extension of the term of a mining license

28.1.Not less than two (2) years prior to the expiration of a mining license, the license holder may submit an application on the form approved by the State administrative agency for an extension of the mining license. The following documents shall be attached to the application:

28.1.1.a copy of the mining license if delivered by post, a notarized copy /competent person receiving the documents shall check the documents against the originals and record that the copies are true for free;

 /This sub-paragraph was modified according to the law as of February 10, 2011/

28.1.2.receipts for payments of license fee and service fee;

28.1.3.documentation evidencing the inspection of the implementation of the environmental plan as set forth in Article 39 of this Law.

28.2.Within fifteen (15) business days following the receipt of an application set forth in paragraph 28.1 of this Law, the State administrative agency shall verify that the license holder is eligible to hold the license. If there are no violations, the license term shall be extended for the period set forth in sub-paragraph 27.1.7 of this Law. The extension shall be recorded in the license registry book and the applicant shall be notified;

/This paragraph was amended according to the law as of July 16, 2009/

28.3.Within seven (7) business days following the decision to extend the mining license, the State administrative agency shall notify the authorities set forth in paragraph 26.7 of this Law, and publicize the extension in a daily newspaper.

Article 29.Investment agreement

29.1.In the first 5 years of operation in the territory of Mongolia, if the holder of the mining license requests to invest more than 50 million US dollars, an investment agreement can be concluded with him/her in order to maintain the conditions of operation for a certain period of time, and the following shall be included in it:

29.1.1.maintain a stable tax environment;

29.1.2.sell products manufactured by the license holder at the international market price;

29.1.3.ensure the right to dispose of the earned income;

29.1.4.amount and period of investment;

29.1.5.extraction of minerals with minimal damage to the health of the population and the environment;

29.1.6.protection and rehabilitation of the environment;

29.1.7.not to have a negative impact on other types of production and operations;

29.1.8.regional development, creation of new jobs;

29.1.9.compensation for damages.

29.2.The Cabinet members in charge of finance, geology, mining and environmental matters, upon the authorization of the Government of Mongolia, shall conclude the agreement, specified in paragraph 29.1 of this Law, with the investor.

29.3.The agreement specified in paragraph 29.1 of this Law shall be concluded for 5 years if the amount of investment in the first 5 years is equal to more than 50 million US dollars, or for a period of 10 years if the amount of investment is equal to more than 100 million US dollars, or for a period of 30 years if the amount of investment is equal to more than 300 million US dollars.

29.4.If the amount of investment is between 50 million US dollars and 100 million US dollars, the Government will discuss it, and if it is more than 100 million US dollars, the State Great Khural will discuss it.

/This Article was revoked according to the law as of October 3, 2013/

Article 30.Concluding an agreement with an investor

30.1.The investor shall submit the request for conclusion of the agreement specified in paragraph 29.1 of this Law and a draft of the agreement to the state central administrative bodies mentioned in paragraph 29.2 of this Law, and shall attach the following documents to it:

30.1.1.information of the amount of capital to be invested in the first 5 years, the period, the capacity of the plant, the type of products, the method and technology when extracting deposits, and feasibility study;

30.1.2.a note of the Mineral Resources Professional Council on registration of the reserves of the deposit in the unified register of state resources.

30.2.The state central administrative bodies specified in paragraph 30.1 of this Law shall check whether the investor's request, draft contract, and attached documents meet the requirements specified in paragraphs 29.3 and 30.1 of this Law, and inform the person who made the request within 10 working days.

30.3.The state central administrative bodies specified in paragraph 30.1 of this Law shall review the investor's request, draft contract, and attached documents within 3 months after receiving them, and if necessary, based on additional clarifications which is made for a period of up to 3 months on basis of opinions and conclusions of appropriate organizations and experts, the agreement shall concluded with the investor in accordance with paragraph 29.1 of this Law.

30.4.After signing the investment agreement in accordance with paragraph 30.3 of this Law, the notification of terms of the agreement shall be submitted to the Mongolbank and other relevant organizations.

/This Article was revoked according to the law as of October 3, 2013/

CHAPTER FIVE

CONDITIONS FOR MAINTAINING THE ELIGIBILITY TO HOLD EXPLORATION AND MINING LICENSES

Article 31.Maintaining the eligibility to hold a license

31.1.A license holder is obliged to comply with the conditions and requirements set forth in Article 32 and 33 of this Law, and failure to comply shall result in revocation of the license pursuant to Article 56 of this Law.

Article 32.License fees

32.1.The license holder shall pay license fees annually as set forth in this Law.

32.2.Exploration license fees shall be payable for each hectare included within the exploration area at the following rates: 145 tugrugs for the first year, 290 tugrugs for the second year and 435 tugrugs for the third year of the term of the exploration license; 1450 tugrugs for each of the fourth to sixth years of the term of the exploration license; 2175 tugrugs for each of the seventh to ninth years and 7250 tugrugs for 10-12 year of the term of the exploration license.

/This paragraph was amended according to the law as of January 23, 2015/

/Addendum was made to this paragraph according to the law as of July 1, 2014/

32.3.Mining license fee shall be 21 750 tugrugs per hectare of the licensed mining area and for limestone, coal and domestic production minerals, the fee shall be 7250 tugrugs for each hectare.

/This paragraph was amended according to the law as of January 23, 2015/

/This paragraph was modified according to the law as of January 9, 2014/

Article 33.The minimum cost of exploration and its verification

33.1.Each year an exploration license holder shall carry out reconnaissance and exploration work in the license area costing not less than the amounts per hectare specified below:

33.1.1.USD 0.5 for each of the second and third years of the term of the exploration license;

33.1.2.USD 1.00 for each of the fourth to sixth years of the term of the exploration license;

33.1.3.USD 1.50 for each of the seventh to ninth years of the term of the license;

33.1.4.USD 10 for each of the tenth to twelve years of the term of the license.

/This sub-paragraph was added according to the law as of July 1, 2014/

33.2.The exploration work expenditures shall be verified by the State administrative body based up on an annual geological and exploration work report, and the financial balance sheets of the license holder.

33.3.State administrative body shall conduct worksite inspections to verify actual expenditures, if required.

Article 34.Payment of license fees

34.1.License fees for the first year shall be paid within ten (10) business days after the license holder receives the notice set forth in paragraph 20.3, sub-paragraphs 26.3.2 and 26.3.3 of this Law.

/This paragraph was amended according to the law as of November 10, 2017/

34.2.License fees for subsequent years shall be payable annually in advance, on or before the anniversary date of the issuance of the license.

34.3.The amount of the license fee shall be calculated on the basis of the measurements of the license area as registered in the registry of licenses, and the amount of the fee shall not change for that particular year.

34.4.The license fee shall be deemed paid upon receipt by the State administrative agency of a document certifying the payment of the fees and the payment date shall be the date of the bank transaction.

34.5.The Mongolbank's official rate for that day shall be used when calculating costs or expenses when expressed in USD in this Law.

/This paragraph was modified according to the law as of January 23, 2015/

34.6.If fails to pay payment specified in paragraph 34.2 of this law, liquidated damage equal to 0.3% of the annual payment amount shall be imposed for each day overdue.

/This paragraph was added according to the law as of July 1, 2014/

34.7.Overdue day specified in paragraph 34.6 of this law shall be up to 30 days and if exceeded such period, a license shall be revoked in accordance with Article 56 of this law.

/This paragraph was added according to the law as of July 1, 2014/

CHAPTER SIX

OBLIGATIONS OF A LICENSE HOLDER

Article 35.General obligations of a license holder

35.1.While carrying out its activities, a license holder shall comply with the general obligations set forth in this Article. Failure to comply with the general obligations will subject the license holder to the penalties set forth in the Law on Violations.

/This paragraph was amended according to the law as of December 4, 2015/

35.2.An exploration license holder shall keep the following documents at the actual site of the exploration work:

35.2.1.copy of the exploration license;

/This sub-paragraph was amended according to the law as of February 10, 2011/

35.2.2.environmental management plan and report;

/This sub-paragraph was amended according to the law as of May 17, 2012/

35.2.3.exploration work plan reviewed by an authorized organization for inspection.

/The term "the state administrative organization and professional inspection agency" was changed to "authorized organization for inspection" according to the law as of November 11, 2022, and shall be enforced from January 1, 2023/

35.3.A mining license holder shall keep the following documents at the mine:

35.3.1.copy of the mining license;

/This sub-paragraph was amended according to the law as of February 10, 2011/

35.3.2.feasibility study on mineral mining and a mining plan reviewed by the relevant organization;

35.3.3.environmental impact assessment;

35.3.4.environmental management plan;

/This sub-paragraph was amended according to the law as of May 17, 2012/

35.3.5.property leases and product sales agreements;

35.3.6.records establishing and marking the boundary of the mining area;

35.3.7.agreements on land and water use.

35.4.A mining license holder shall commence its mining activities after it has been accepted by a commission appointed by the State central administrative body in charge of geology and mining matters.

35.5.The mining license holder shall exhaust all of the mineral reserves. It is prohibited to mine selecting the high grade areas.

35.6.The exploitation of license holder legal entity and artisanal mining gold miner shall turn over its extracted gold within a given financial year.

/This paragraph was added according to the law as of January 24, 2014/

35.7.A license holder shall notify the State administrative body in charge of petroleum matters if it discovers methane during coal mining.

/This paragraph was added according to the law as of July 1, 2014/

35.8.A license holder may carry out exploitation under the Petroleum Law if it uses methane set out in paragraph 35.7 of this law.

/This paragraph was added according to the law as of July 1, 2014/

35.9.A license holder shall give priority to a taxpayer with goods, works or services satisfy standard requirements and registered in Mongolia when procures goods, works or services and hires subcontractors required for its operations. 

/This paragraph was added according to the law as of July 1, 2014/

35.10.A mining license holder shall inform the State administrative body in charge of geology and mining matters when discontinues its operations due to technical accident, force majeure, court decision or in accordance with the procedure stipulated in Law on Violation Investigation and discontinues mining development and concentration production operations due to other reasons.

/This paragraph was amended according to the law as of May 18, 2017/

/This paragraph was added according to the law as of July 1, 2014/

35.11.Extracted, concentrated and semi-produced products shall be given priority at first place to productions operating in the territory of Mongolia at market price.

/This paragraph was added according to the law as of July 1, 2014/

35.12.A license holder shall inform the State administrative body within 14 days in the event of it changes its address, e-mail, telephone and fax numbers.

/This paragraph was added according to the law as of July 1, 2014/

Article 36.Establishing the boundaries and marking the area held under a mining license

36.1.Within three (3) months following the registration of the mining license in the registry of licenses, the mining license holder shall, as set forth in paragraph 26.6 of this Law, establish the boundaries and mark the approved mining area by permanent markers as set forth in the technical requirements specified by an authorized organization for inspection. The establishment of the boundaries of the mining area shall be performed by a person authorized by the State administrative body, who shall file a report with the agency upon completion.

/In this paragraph, the term "professional inspection agency" was changed to "authorized organization for inspection" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

36.2.A mining license holder shall preserve the markers and adjust and replace the markers upon reorganization within the area as set forth in decisions of the State administrative body.

Article 37.Environmental protection

37.1.Exploration and mining license holders shall comply with the laws and legislation on environmental protection, and with Articles 38 and 39 of this Law.

37.2.A license holder may not commence prospecting and exploration operations without first obtaining written approval from the relevant environmental agency, or commence mining operations without a commission approval as set forth in paragraph 35.4 of this Law. In case of a dispute arising out of these matters, the complaint may be filed with an authorized organization for inspection.

/In this paragraph, the term "state professional inspection agency" was changed to "an authorized organization for inspection" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

Article 38.Environmental protection obligations of an exploration license holder

38.1.An exploration license holder shall have the following obligations regarding environmental protection:

38.1.1.Within thirty (30) days following the receipt of an exploration license, the exploration license holder shall prepare an environmental management plan by consulting with the state environmental inspection agency and the Governor of the soum or district where the exploration area is located;

38.1.2.The plan stated in paragraph 38.1.1 of this Law shall provide measures to ensure that the level of the environment pollution does not exceed the accepted limits, and rehabilitation of the area by means of backfilling, leveling and cultivation to allow future public use; 

38.1.3.The plan stated in paragraph 38.1.1 of this Law shall be delivered to and approved by the Governor of the relevant soum or district where the exploration area is located;

38.1.4.Upon approval of the environmental management plan as set forth in the sub-paragraph 38.1.3 of this Law, a copy of this plan shall be delivered to the local environmental inspection agency;

/This sub-paragraph was amended according to the law as of May 17, 2012/

38.1.5.The license holder shall record all instances of adverse environmental impacts resulting from the exploration activity in its annual environmental management plan report, and deliver this report to the Governor of the relevant soum or district and the environmental inspection agency;

/This sub-paragraph was amended according to the law as of May 17, 2012/

38.1.6.The report set forth in sub-paragraph 38.1.5 shall contain information on measures taken to protect the environment and proposed amendments to the environmental protection plan directed at preventing the possible impact on the environment of new exploration machinery and technology. All amendments to the environmental protection plan shall be approved by the Governor of the relevant soum or district;

38.1.7.provide an official of the State and local administrative body in charge of monitoring implementation of the laws on environmental protection with an opportunity to enter the exploration area to conduct monitoring activities on the site;

38.1.8.ensure the discharge of its responsibilities with respect to environmental protection, an exploration license holder shall deposit funds equal to 50% of its environmental protection budget for that particular year in a special bank account established by the Governor of the relevant soum or district.

38.2.Within ten (10) days after receiving the environmental protection plan specified in sub-paragraphs 38.1.3 and 38.1.6 and its proposed amendments, the Governor of the soum or district shall review and approve the plan and return it to the license holder.

38.3.If a license holder fails to fully implement the measures provided in the environmental management plan, the Governor of the relevant soum or district shall use the deposit set forth in sub-paragraph 38.1.8 of this Law to implement these measures, and the license holder shall provide any additional funds required without dispute.

/This paragraph was amended according to the law as of May 17, 2012/

38.4.If the license holder complies with all of the obligations of the environmental management plan, the deposited funds set forth in sub-paragraph 38.1.8 of this Law shall be returned to the license holder.

/This paragraph was amended according to the law as of May 17, 2012/

Article 39.Environmental protection obligations of mining license holders

39.1.A mining license holder shall have the following obligations with regard to environmental protection:

39.1.1.an environmental impact assessment and an environmental management plan shall be prepared by a person set forth in paragraph 24.1 of this Law before obtaining a mining license, and by the person who obtained a mining license through tender;

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.2.the environmental impact assessment shall identify the possible adverse environmental impacts from the proposed mining operations regarding public and health, environmental and shall include preventive measures that avoid and minimize such adverse impacts;

39.1.3.the environmental management plan shall contain measures to ensure that mining operations are conducted in the least damaging way to the environment. The plan shall also identify preventive measures to protect air and water, humans, animals and plants from the adverse impacts of mining operations;

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.4.apart from sub-paragraph 39.1.3 of this Law, an environmental management plan must include the following:

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.4.1.storage and control of toxic and potentially toxic substances and materials;

39.1.4.2.protection, utilization and conservation of surface and ground water;

39.1.4.3.construction of tailings dams and ensuring the mine area safety;

39.1.4.4.rehabilitation measures set forth in sub-paragraph 38.1.2 of this Law;

39.1.4.5.other measures as may be appropriate for the particular type of mining operation.

39.1.5.The environmental impact assessment and environmental management plan prepared according to the sub-paragraph 39.1.1 of this law shall be submitted to the State central administrative body in charge of the environmental matters;

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.6.Immediately following the approval of the environmental impact assessment and environmental management plan the license holder shall deliver a copy of the documents to the Governor of the aimag, soum or district and to the local environmental inspection agency of the area where the mineral deposit is located;

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.7.Mining license holders shall record all instances of adverse environmental impact resulting from mining activity, prepare and send a copy of its annual report on the implementation of the environment management plan to the State central administrative body in charge of environmental matters, the Governor of relevant aimag, soum or district and an authorized organization for inspection. The report shall contain the following:

/In this paragraph, the term "the state professional inspection agency" was changed to "authorized organization for inspection" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.7.1.information on measures taken to protect the environment;

39.1.7.2 new machinery and technology utilized;

39.1.7.3.proposed amendments to the environmental impact assessment and environmental management plan with regard to possible adverse impacts on environment due to expansion of mining operations and enhancement of its production capacity.

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.1.8.a mining license holder shall provide officials of local and State administrative bodies in charge of monitoring implementation of legislation on environmental protection with an opportunity to enter the mining claim area, and to conduct inspection activities on the site;

39.1.9.to regulate as provided in paragraph 9.8 of the Law on Environmental Impact Assessment.

/This sub-paragraph was modified according to the law as of May 17, 2012/

39.2.The State central administrative body in charge of the environmental matters shall review the documents set forth in sub-paragraphs 39.1.5 and 39.1.7.3 and notify the license holder of its decision within thirty (30) days after receiving the documents.

39.3.If a mining license holder fails to fully implement the measures of environmental rehabilitation, the State central administrative body in charge of the environmental matters shall use the deposited funds set forth in sub-paragraph 39.1.9 of this Law to implement rehabilitation work by a specialized organization, and the license holder shall provide any additional funds required without dispute.

39.4.If the license holder complies with all of the obligations of the environmental management plan, the deposited funds set forth in sub-paragraph 39.1.9 of this Law shall be returned to the license holder.

/Addendum was made to this sub-paragraph according to the law as of May 17, 2012/

/This sub-paragraph was amended according to the law as of May 17, 2012/

39.5.The deposited funds set forth in paragraph 39.3 of this Law shall be transferred before the commencement of mining operation of the corresponding year and the State central administrative body in charge of the environmental matters shall notify the Governor of the relevant soum or district of the transfer.

/This paragraph was modified according to the law as of May 17, 2012/

39.6.If a license holder fails to transfer the deposited funds set forth in sub-paragraph 39.1.9 of this Law within the period required by paragraph 39.5 of this Law, the soum or district Governor shall have the right to halt mining activities for the year.

39.7.In case of a failure to complete rehabilitation activities for the year, the Governor of the relevant soum or district, and an authorized organization for inspection jointly hold the right to prevent the commencement of mining activities for the next year.

/In this paragraph, the term "the state professional inspection agency" was changed to "authorized organization for inspection" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

39.8.The procedures of monitoring the transactions of special accounts set forth in sub-paragraphs 38.1.8 and 39.1.9 shall be approved by the member of the cabinet in charge of the environment.

39.9.The State central administrative body in charge of the environmental matters shall require the license holder to provide amendments to the environmental management plan and environmental impact assessment if new circumstances arise which have adverse impacts on environment due to introduction of new equipment and technology during the valid license term.

/This paragraph was amended according to the law as of May 17, 2012/

Article 40.Review of updated environmental impact assessment and management plan

/The title of this Article was amended according to the law as of May 17, 2012/

40.1.Exploration license holders applying for a license extension shall submit their modified environmental management plan to the Governor of the relevant soum or district for approval prior to the expiration of the exploration license.

/This paragraph was amended according to the law as of May 17, 2012/

40.2.Mining-license holders applying for a license extension shall submit their modified environmental impact assessment and environmental management plan to the State central administrative body in charge of the environmental matters for approval.

/This paragraph was amended according to the law as of May 17, 2012/

40.3.The assessment and plan set forth in paragraphs 40.1 and 40.2 of this Law shall be approved as set forth in paragraphs 38.2 and 39.2 of this Law.

Article 401.Cultural heritage protection

401.1.A license holder shall perform obligations set out in the Law on Cultural Heritage Protection and Articles 402 and 46 of this law.

401.2.It shall be prohibited to prospect, explore and exploit minerals without preliminary research and approval by paleontological, archeological and ethnological professional institutions when carries out the mineral exploration. 

/This Article 401 was added according to the law as of May 15, 2014/

Article 402.License holder's obligations with regard to cultural heritage protection

/This Article was added according to the law as of May 15, 2014/

402.1.A license holder shall undertake the following obligations with regard to cultural heritage protection:

402.1.1.provide government and local administration authority officials and state control inspectors authorized to monitor and oversight implementation of the cultural heritage protection legislation with access to exploration areas and conduct on-site inspection;

402.1.2.during mineral prospecting and exploration, ensure safety of discovered cultural heritage and register with cultural heritage registry and information data under the law and transfer such heritage to relevant authority for storage.

/This Article 402 was added according to the law as of May 15, 2014/

Article 41.Compensation for damages to property

41.1.License holders shall fully compensate owners and users of private and public residential dwellings, wells, winter animal shelters, other structures, and historic and cultural landmarks for the damages caused by exploration or mining operations, including, if necessary, relocation costs.

Article 42.Relations with local administrative bodies

42.1.A license holder shall work in cooperation with the local administrative bodies and conclude agreements on issues of environmental protection, mine exploitation, infrastructure development, job creation and donation and assistance in relation to the mine-site development.

/After words "job creation", the words "donation and assistance" were added to this paragraph by the law of November 11, 2022, and shall be enforced from January 1, 2023/

42.2.A license holder in cooperation with the local administrative agency shall organize a public forum in relation to issues set forth in paragraph 42.1.

/The word "may organize" was changed to "shall organize" by the law of November 11, 2022, and it shall be enforced from January 1, 2023/

42.3.The citizens may elect a representative among them whose obligation is to provide public monitoring on license holder's environment rehabilitation activities.

/Addendum was made to this paragraph according to the law as of July 16, 2009/

42.4.The agreement stipulated in paragraph 42.1 of this Law concluded between the local administrative body and the license holder shall be open and transparent to the public.

/This paragraph was added according to the law as of November 11, 2022, and shall be enforced from January 1, 2023/

42.5.Local administrative and other organizations, officials, citizens, and legal entities are prohibited from demanding donations and assistance from the license holder that are not included in the agreement specified in paragraph 42.1 of this Law.

/This paragraph was added according to the law as of November 11, 2022, and shall be enforced from January 1, 2023/

Article 43.Employment requirements

43.1.The mining license holder and its subcontractors are obliged to provide jobs to the citizens of Mongolia, and the workforce of the legal entity shall be subject to the following requirements:

/This paragraph was modified according to the law as of November 11, 2022, and it shall be enforced from January 1, 2023/

/Addendum was made to this paragraph according to the law as of July 1, 2014/

43.1.1.up to 10% of the employees can be foreign citizens;

/This sub-paragraph was modified according to the law as of November 11, 2022, and it shall be enforced from January 1, 2023/

43.1.2.at least 5% of the Mongolian employees must be citizens of the soum or district where the mining activities are carried out.

/This sub-paragraph was modified according to the law as of November 11, 2022, and it shall be enforced from January 1, 2023/

43.2.If the number of foreign citizens employed exceeds the percentage set forth in sub-paragraph 43.1.1 of this Law, the license holder shall pay ten (10) times of Mongolia's minimum wage for each foreign citizen for every month. If the number of local citizens employed does not reach to the percentage specified in sub-paragraph 43.1.2 of this Law, the license holder shall pay twice of Mongolia's minimum wage for each workplace monthly.

/This paragraph was modified according to the law as of November 11, 2022, and it shall be enforced from January 1, 2023/

43.3.The payment set forth in paragraph 43.2 shall be submitted to the budget of the relevant soum or district and shall be disbursed to support in employment, creating new jobs and the educational and health sectors; relevant procedures shall be approved by Citizens' Representatives' Khural of the relevant soum or district.

/Addendum was made to this paragraph according to the law as of July 2, 2021/

/Addendum was made to this paragraph according to the law as of February 4, 2016/

Article 44.Ensuring health and safety standards

44.1.The license holder shall carry out activities providing for the safety for citizens of the relevant soum or district, labor safety and hygiene for mine employees as set forth in the applicable laws and regulations.

Article 45.Requirements for closure of a mine

45.1.In case of mine or concentration plant is closed partially or wholly, a license holder shall inform the State central administrative body at least year before, and take preparatory measures pursuant to sub-paragraph 10.1.14 of this Law, and implement the following measures:

/This paragraph was modified according to the law as of July 1, 2014/

/This paragraph was modified according to the law as of May 17, 2012/

45.1.1.take all necessary measures to ensure safe use of the mine area for public purposes and rehabilitation of the environment;

45.1.2.take preventive measures if the mine claim is dangerous for public use;

45.1.3.remove all machinery, equipment and other property from the mining area except as permitted by local administrative bodies or an authorized organization for inspection.

/In this sub-paragraph, the word "professional inspection office" was changed to "authorized organization for inspection" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

45.2.Mining license holders shall prepare a detailed map of an appropriate scale showing dangerous or potentially dangerous areas created by mining operations by placing necessary warnings and markings in the vicinity of the mining claim and shall submit the map to an authorized organization for inspection and particular a Governor of soum, bagh or district.

/In this paragraph, the term "professional inspection agency" was changed to "authorized organization for inspection" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

Article 46.Registration and sale of precious stones and metals

46.1.A mining license holder shall request State administrative body in charge of assaying to determine assaying and quality of all extracted precious stones and metals and to register their quantity.

/This paragraph was modified according to the law as of April 22, 2022/

/This paragraph was amended according to the law as of December 19, 2008/

46.2.A list of minerals and precious stones subject to registration a set forth in paragraph 46.1 of this Law and the procedures for their assay, registration and quality determination shall be approved by the Government.

46.3.The Mongolbank shall pay international market prices when purchasing precious stones and metals.

46.4.A mining license holder may export through the Mongolbank precious stones and extracted metals.

46.5.If a license holder extracts a nugget weighing more than 400 grams or which has a peculiar shape though weighing less or a precious stone with rare color and shape, the license holder is obliged to sell it to the treasury fund of the Mongolbank at a premium rate.

Article 47.Royalties

47.1.The person mentioned below shall be the payer of mineral resources royalty:

47.1.1.a mineral license holder;

47.1.2.a person who exported minerals;

47.1.3.a person who orders gold to the Mongolbank or an authorized commercial bank.

/This paragraph was modified according to the law as of November 22, 2019/

/The statement "… legal entity that sold, shipped for sale, or used minerals and anybody sold gold to Mongolbank and authorized commercial bank shall be royalty payer and pay royalties to state budget on the sales value of all types of minerals that is sold, shipped for sale, or used" stated in this paragraph was revoked according to the resolution No.4 of Constitutional Court dated October 30, 2019/

/This paragraph was modified according to the law as March 26, 2019/

/This paragraph was amended according to the law as of December 23, 2011/

47.2.The sales value set forth in paragraph 47.16 of this Law shall be determined as follows:

/This paragraph was amended according to the law as of November 22, 2019/

47.2.1.for exported products the sales value shall be the average monthly price of the products, or similar products, based on regularly published international market prices, or on recognized principles of international trade;

47.2.2.for products sold or used on the domestic market, the sales value shall be based on the domestic market price for the particular or similar product;

47.2.3.for products sold on international or domestic markets, where it is impossible to determine market prices, the sales value shall be based on the revenue derived from the sale of the product as declared by the license holder.

47.3.The royalty rates shall be as follows:

47.3.1.royalties for domestically sold coal shall be two and one-half (2.5) per cent of the sales value of all products extracted from the mining claim which are sold, shipped for sale, or used; 

47.3.2.the royalties for gold sold to the Mongolbank and commercial banks authorized by it shall be 5% of the sales value, and shall not be increased by the percentage specified in paragraph 47.5 of this law;

47.3.3.5% of the sales value of the product for all types of mineral resource royalties, except for those specified in sub-paragraphs 47.3.1 and 47.3.2 of this law.

/This paragraph was modified according to the law as of November 22, 2019/

47.4.The royalties shall be imposed adding the percent specified in sub-paragraph 47.3.2 of this Law on the percent specified in paragraph 47.5 of this Law depending on the product's market rate increase.

/This paragraph was revoked according to the resolution No.4 of Constitutional Court dated October 30, 2019/

/This paragraph was added according to the law as of November 25, 2010/

47.5.Adding to the percentage specified in sub-paragraph 47.3.3 of this Law, the following percentage shall be increased depending on the growth of the market price of the product and the level of processing:

/This paragraph was amended according to the law as of November 22, 2019/

/Sub-paragraphs 47.5.11, 47.5.12, 47.5.13 of this paragraph was revoked according to the resolution No.4 of the Constitutional court dated October 30, 2019/

/This paragraph was added according to the law as of November 25, 2010/

47.6.The Government shall approve reporting and payment procedure to estimate royalties' percent and to impose fee. 

/This paragraph was modified according to the law as of November 22, 2019/

/This paragraph was amended according to the law as of March 26, 2019/

/This paragraph was added according to the law as of November 25, 2010/

47.7.When minerals are exported directly or by producing concentrates or products with increased beneficial content, no duplicate payment shall be imposed, and depending on the assessment and rate of payment for that mineral, the payment receipt specified in paragraph 47.18 of this law and the withholding tax report as specified in paragraph 47.19 shall be previously imposed will be deducted from the fee.

/This paragraph was modified according to the law as of November 22, 2019/

/This paragraph was modified according to the law as of March 26, 2019/

/This paragraph was added according to the law as of November 25, 2010/

47.8.The Government shall approve requirement, category, estimation basic principle and methodology at ore, concentration and product processing level specified in paragraphs 47.5 and 47.17 of this Law basing on a proposal of State central administrative body in charge of geological, mining and financial matters.

/Addendum was made to this paragraph according to the law as of November 22, 2019/

/This paragraph was added according to the law as of November 25, 2010/

47.9.The exploration license holder can buy and sell minerals extracted during the exploration work on basis of registration of types and quantity of minerals with the state administrative body in change of geology and mining matters. The registered information shall be submitted to the tax authority from time to time, and the royalties of mineral resources shall be paid and reported in the same manner as a mining license holder. The Government shall regulate the maximum limit of minerals to be extracted by trial procedure during the technological process of exploration work, depending on the type.

/This paragraph was modified according to the law as of November 11, 2022, and it shall be enforced from January 1, 2023/

/The numbering of this paragraph was changed according to the law as of November 25, 2010/

47.10.Royalty payer set out in paragraph 47.1 of this law and other than that paid gold to the Mongolbank and authorized commercial banks shall pay monthly royalty of sold, shipped for sale or used minerals within 20th day of next month, and year end payment within 10th day of February of next year, to the budget. 

/This paragraph was modified according to the law as of March 26, 2019/

/This paragraph was modified according to the law as of June 4, 2015/

/The numbering of this paragraph was changed according to the law as of November 25, 2010/

47.11.Royalty payer set out in paragraph 47.1 of this law and other than that paid gold to the Mongolbank and authorized commercial banks shall submit report on volume, sales value and payment amount of sold, shipped for sale or used minerals, royalty payment report, on quarterly basis and at the accumulative basis, in the form approved by the state administrative body in charge of taxation matters within 20th day of first month of next quarter and year-end report within 10th day of February of next year.

/In this paragraph, the term "in the form approved by the state administrative body in charge of specialized inspection" was changed to "amount" by the law dated November 11, 2022, and shall be enforced from January 1, 2023/

/This paragraph was amended according to the law as of November 22, 2019/

/This paragraph was modified according to the law as of March 26, 2019/

/The numbering of this paragraph was changed according to the law as of November 25, 2010/

47.12.The Mongolbank and authorized commercial banks shall withhold royalty at the rate set out sub-paragraph 47.3.2 of this law from the amount of gold sold to them and pay royalty to the state budget.

/This paragraph was added according to the law as of March 26, 2019/

47.13.The Mongolbank and authorized commercial banks shall submit payment report and information on the royalty, paid to budget in accordance with paragraph 47.12 of this law, to the state administrative body in charge of tax in its approved form within 20th day of next month.

/This paragraph was added according to the law as of March 26, 2019/

47.14.The Government shall prepare and periodically publish a list of commodity exchange prices and related information, which shall be used for the purpose of calculating the sales value of exported products.

/This paragraph was amended according to the law as of November 22, 2019/

/The numbering of this paragraph was changed according to the law as of March 26, 2019/

/The numbering of this paragraph was changed according to the law as of November 25, 2010/

47.15.As for a taxpayer with tax environment stabilization certificate, minerals royalty shall be imposed by percentage stated in the certificate pursuant to the Investment Law.

/The numbering of this paragraph was changed according to the law as of March 26, 2019/

/This paragraph was added according to the law as of October 3, 2013/

47.16.The mineral resource royalty payer shall pay the mineral resource royalty from the sales assessment of all types of minerals to the state budget without duplication in accordance with paragraph 47.7 of this law in the following activities:

/This paragraph was added according to the law as of November 22, 2019/

47.16.1.sold, shipped for sale;

47.16.2.exported;

47.16.3.used for his/her own needs.

47.17.The royalties for coal and coal products shall be calculated based on the percentage specified in sub-paragraph 47.3.3 of this Law, and the following percentage can be increased depending on the type of product and the market price:

/This paragraph was added according to the law as of November 22, 2019/

47.18.The mineral license holder and the person through whom the mineral is sold shall make a payment receipt as specified in the tax legislation whenever the mineral is sold or shipped for sale, and the payment receipt shall include the type, classification, quantity of the mineral, the sales valuation, and the amount of the mineral resource royalty imposed.

/This paragraph was added according to the law as of November 22, 2019/

47.19.Except as specified in sub-paragraph 47.1.3 of this Law, the payer who purchases minerals from a person who does not hold a mineral license shall deduct the mineral resource royalties per purchased mineral, and shall report and pay to the budget in accordance with paragraphs 47.10 and 47.11.