Mongolia's Performance on the Resource Governance Index
Mongolia received a "partial" score of 51, ranking 26th out of 58 countries. A very good Institutional & Legal Setting score was contrasted with Mongolia's poor performance on the Reporting Practices component.
(out of 58)
(out of 100)
|9||Institutional & Legal Setting||80|
|37||Safeguards & Quality Controls||49|
Institutional & Legal Setting (Rank: 9th/58, Score: 80/100) learn more
Mongolia's "satisfactory" score of 80 reflects clear revenue collection mechanisms and a range of reporting requirements that are not always fulfilled in practice.
Mongolia's Mineral Resource Authority regulates the sector and grants licenses on a first come, first served basis in exchange for royalties and taxes. It is independent of the state-owned company Erdenes MGL. The Finance Ministry collects payments from mining companies and places all resource-related revenues in the national treasury.
Environmental impact assessments are required by law prior to the award of any mineral rights. Mongolia adopted a Freedom of Information Act in 2011, but it still is possible for businesses and government agencies to keep some documents confidential. Mongolia has been an Extractive Industries Transparency Initiative (EITI) compliant country since 2010.
Reporting Practices (Rank: 41st/58, Score: 39/100) learn more
With little government data on the national mining company, Mongolia received a "failing" score of 39.
Legislation governing the licensing process is readily accessible, but little information about the mineral deposits to be licensed is made public. Contracts are rarely published and environmental impact assessments are available only for projects already underway.
The Finance Ministry publishes regular information on production volumes, prices, the value of mineral exports, names of companies operating in the country, production data by company, royalties, special taxes, dividends, and license fees. The Mineral Resources and Energy Ministry also publishes information on industry operations, including investment in exploration and development, but does not report revenues. The Mineral Resource Authority publishes information on commodity prices, estimates of investment in exploration and development, the names of companies operating in the country, royalties, and license fees, but without comparative years. Mongolia's 2010 EITI report includes comprehensive information on disaggregated revenue streams.
Safeguards & Quality Controls (Rank: 37th/58, Score: 49/100) learn more
Mongolia received a "weak" score of 49, reflecting a lack of public oversight of the state mining company.
Mongolia's Minerals Law limits the discretion of the Mineral Resource Authority in awarding licenses. Third parties are allowed to appeal licensing decisions. The National Audit Office reviews the government's budget annually. The parliament's Budget Committee reviews the audits within one year but does not separately scrutinize resource-related revenues. Mongolia recently adopted a conflict of interest law requiring government officials with a role in oversight of the mining sector to disclose their financial interest in any extractive activity.
Enabling Environment (Rank: 20th/58, Score: 48/100) learn more
Low global rankings for corruption control and government effectiveness contributed to Mongolia's "weak" score of 48.
State-Owned Companies (Rank: 38th/45, Score: 20/100) learn more
The government established Erdenes MGL to represent the state's interest in strategically important mineral deposits. Almost no information is available on the functioning of the company. It publishes no financial reports, despite a legal obligation to do so.
Subnational Transfers (Rank: 19th/30, Score: 56/100) learn more
According to the Minerals Law, 30 percent of royalty payments and 50 percent of special license fees go to local governments. These transfers are published by the central government, which generally follows the rules of resource revenue sharing. Local governments do not report their receipts.
INSTITUTIONAL & LEGAL SETTING
SAFEGUARDS & QUALITY CONTROLS
To explore all data and compare country scores, use the RGI Data Tool.
Key Economic Indicators
|GDP (constant 2011 international $ billion)||1.5||2.9||8.8|
|GDP per capita, PPP (constant 2005 international $)||2,208||2,862||4,187|
|Extractive exports (% total exports)||42||63||80|
|Source: World Bank. Extractive exports 2011 data from 2007.|