The mining sector makes a major contribution to the economy, accounting for 9% of the GDP, 49% of industrial production, and 40% of export earnings. The formal sector employs over 12,000 people, while the informal sector (known as the artisanal mining industry) employs more than twice this number (estimated at nearly 30,000 people).
The geology of Mongolia is complex and its mineral potential vast; nearly 6000 deposits of more than 80 different minerals have been identified. The most economically significant are copper (400 000 tonnes of copper concentrate exported per year), gold (11 tonnes), molybdenum (3 000 tonnes) and fluorite. Mongolia also uses coal (five million tons), steel and phosphate, has still largely under-exploited uranium and oil deposits (reserves estimated at 6 billion barrels), and semi- precious. These stones include white rock crystal, turquoise, yellow topaz – among others – red garnet, tourmaline and fluorite. Silver, copper, iron and manganese are found in the Paleozoic layers of the mountains,
To keep these high levels of export, the country’s main mine, at Erdenet, extracts more than 20 million tons of raw material every year – making it one of the largest copper mines in the world.
Apart from Erdenet, there are more than 200 other mining operations in Mongolia, with heavy investment from foreign companies. Exploration licenses were granted for nearly 25% of the territory, covering 40 million hectares. The world mining industry sees Mongolia as a very attractive prospect in terms of new deposits, and more than 30 international mining and / or trading companies have branches in Mongolia.
This path of development, although promising from an economic point of view in the decades to come, is however dangerous for the future of the country.
The mining industry is unsustainable by definition; based on the exploitation of non-renewable resources, it is no longer required to prove the negative impacts it brings: destruction of natural environments (dynamite), deforestation, poisoning of air and water (such as fauna and flora, including humans) … See the Mining, social and environmental impacts report of the World Rainforest Movement (in French: www.wrm.org.uy; – information by subject; – mining; – French) .
But let us remain more succinct and hold ourselves to the problems specific to the Mongolian mining industry.
Mongolian production is almost entirely based on exports of copper and gold, and by the same very dependent on world market prices. Moreover, the reserves of the main mine of the country, Erdenet, are more and more difficult to exploit (because deeper). Prospects concentrate their efforts on the discovery of gold deposits of hard rocks and not of placement (superficial alluvial concentration of gold, majority), which are exhausted too quickly.
In addition, promising new mines (such as Oyu Tolgoi, a world class copper / gold mine) are far from everything: water, electricity, roads … and their profitability becomes questionable in the face of the very heavy investment of necessary infrastructure .
The scope of the prospecting area, in contact with the country’s natural mineral wealth (more than 25% of the territory!), Illustrates in itself the risks associated with this development path. The thirty million heads of Five Muzzles can not evolve into privatized areas where the steppe is undermined by mining. Soil ownership then becomes a matter of state; the temptation to privatize land for the use of foreign mining companies is strong – state property until then, only the Mongols for the time being entitled to buy land outside the cities. The nomadic herders do not have the financial means to buy the vast territories over which they have lived for generations; the compensations proposed can not replace advantageously an autonomous way of life, especially since the jobs offered to the premises remain the most ungrateful and the least well paid. There are many conflicts between breeders, artisanal miners and mining companies; as evidenced by this article, illustrating the conflicts between mining companies (here Ivanhoe) and nomadic herders.
Moreover, and despite the incredible reserves of the territory, the mining industry is a short / medium term investment, based on the extraction of non-renewable resources; once the country is returned, what alternative of possible development?
The mining industry is a path of unsustainable development by definition, with no possible backwardness from the sequelae they leave behind.
Let’s look at the cashmere industry.