Uncertainty in Mining Regs Hampers Mongolian Growth, Says Punke at WTO Review
Growth in U.S. trade with Mongolia will depend on how that country cultivates its mining sector, said U.S. Ambassador to the World Trade Organization, Michael Punke, at the outset of the WTO trade policy review of the central Asian country.…
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“Since 2010, Mongolia has experienced double-digit GDP growth, led by higher commodity prices for copper, gold, zinc, coal and other minerals and by large capital inflows supporting Mongolia’s pursuit of world-class mining development projects,” he said on Sept. 24. But bilateral trade with the U.S. topped off at only slightly more than $700 million in 2012, said Punke. On top of corruption, weak rule of law and other obstacles to economic growth, planned revamping of Mongolia’s 2006 Minerals Law is posing particular challenges to that sector, Punke added. “Officials at all levels of government now delay or even refuse to process normal requests for extending or issuing exploration and mining licenses, ostensibly out of concern that actions taken under the current law might eventually become invalid or require alteration under the new law being considered,” said Punke. “The effect has been to generate long and costly bureaucratic delays in several commercial sectors, which has increased investment risk.”