Mining is one of the main pillars of the Mongolian economy and produces 30% of the total industrial output and accounts for 65.5% of export revenue. The output of the Mongolia mining sector has increased by about 8 percent a year.

Mining is one of the main pillars of the Mongolian economy and produces 30% of the total industrial output and accounts for 65.5% of export revenue. The output of the Mongolia mining sector has increased by about 8 percent a year.

Products from this sector account for 9 percent of the Gross Domestic Product. The New Minerals Law of Mongolia, passed in 1997, has greatly improved the legal environment for investors by clearly defining legal rules, simplifying the licensing process and reducing royalty and exploration fees. The Petroleum Law, adopted in 1991 has also provided a favourable legal environment for investors to operate in this field. During the past four years of geological exploration in Mongolia, platinum has been found in Umnugobi, Bayankhongor, Uvs and Gobi-Altai aimags. Mongolia is becoming an interesting region for mineral exploration due to the discovery of platinum. Thus, the Mongolian mining sector is attracting the attention of foreign investors. A region that may include large amounts of copper was also found, in the areas of Bayankhongor and Gobi-Altai Aimags. Copper, gold and uranium deposits were discovered in Oyu Tolgoi of Umnugobi Aimag and exploration is underway. Canadian Ivanhoe Mines has now raised $ 160 million in equity financing since discovering high-grade gold and copper porphyry at Oyu Tolgoi (Turquoise Hill) in July, 2001. Compared to Erdenet Enterprises, the copper substance is higher there. As of now, about 30 thousand meters straight unless the minerals are identified before reaching that level.

Over the past four years geological cartographical works made in the western and northern part of Mongolia have resulted in the discovery of 33 kinds of mineral resources. Because of the reformed mineral resource law of 1997 many foreign and Mongolian companies began new explorations. Before 1997 about 400 licenses were issued but now there are over 2000 licenses issued among the mining companies. About 15-16 percent of Mongolian territory is involved in mining The Mongolian mining sector covers 1 percent of copper, 3.3 percent of spar, 1.3 percent of molybdenum, 0.1 percent of steel and 0.5 percent of gold of the world. The Erdenet ore-dressing plant, a Mongolian-Russian joint venture, is one of the leading enterprises in this sector.

Erdenet Enterprise accounts for around 13.5 per cent of Mongolia's GDP and 7 per cent of the country's tax revenues, 30 percent of industry and 29 percent of export products. In 1998, when world market copper prices stood at $1574.0 the enterprise took a loss of 22 billion tugrugs. However in 2002, the copper price fell dramatically to $1559 but the enterprise ran a profit of 23 bilIion tugrugs and paid taxes worth 13 million tugrugs. This was due to lower expenditures and an increase in productivity through considerable Management and worker effort.

In 2003 the mine produced 131,175 tonnes of contained copper , with 133,503 tonnes in previous year. Due to a fall in the world copper nice, exports are decreasing and open mining is becoming deeper, down to 300 meters. Ore levels are decreasing, therefore new technology and creation of refined products will help improve profits. Erdenet Mining is considering building a new plant to produce 25.000 tonnes of copper cathode a year.The fleet of heavy trucks "Belaz" and main parts of equipments in the plant are innovative. At present there are 6100 workers and engineering and technical staffs, including 500 specialists from Russia and Common wealth of the Independent States. In 2001, Erdenet was calculated to have resources for the next 40 years.