100% Mongolian mining companies

The Mongolian mining industry represents about 25% of the country’s GDP, 60% of total industrial production, 90% of total exports, and 40% of total state revenues. It is essentially the backbone of the Mongolian economy, and through massive expansion, diversification, entrepreneurial partnerships and a fair amount of growing pains, it has made significant transformations over the past 20 years.  

Though Oyu Tolgi – the largest financial undertaking in Mongolia’s history, which is expected to account for 30% of the country’s GDP upon completion – is perhaps the country’s most famous mining project, Deputy Minister of Mining Mongolia Erdenebulgan Oyun insists that there is much more to the Mongolian mining landscape.

“Oyu Tolgoi is just one project. Mongolia will never allow itself to be dependent on only one project,” he says, reiterating the diversity in scope and scale of projects currently being carried out.

As the proud teacher and mentor to several mining professionals who have gone on to work abroad, Professor Tseveenjav J, Executive Director of the Mongolian Drilling Association (MDA), is well aware of the benefits of cross-cultural experience in the field.

“I’m very glad that drilling companies from Australia, Russia, China and other western companies are coming to Mongolia and our local companies are learning from them. Our young drillers are being trained. Now young Mongolian drillers work not only in Mongolia, but also abroad.”

As the Mongolian mining industry grows, says D. Damb, President of the Mongolian National Mining Association, finding the right balance naturally becomes of greater concern. “We have to find solutions for being successful, we need more infrastructure, more foreign investment, more human capital, more environmental responsibility and we need to work together to keep making profitable business for both national and international players,” he says.

The mining sector’s young blood

Though the Mongolian mining sector stands out for its untapped potential, foreign-friendly investment policies and favorable geographic advantages, perhaps one of its more significant, yet often overlooked strengths is that it is being run almost exclusively by an enterprising and dynamic population of young leaders.

Only three years after his college graduation, Sukhbayar Batsaikhan and a few friends established Sod Gazar, a highly successful mining company with an average employee age of 23. He oversees a savvy team, which within just two years of operation, discovered highly coveted fluorite mines.

“Fluorite mines have not been discovered in Mongolia for over 20 years,” says Mr. Batsaikhan, who adds that Sod Gazar is also branching out into exploration works on rare metals, such as molybdenum and wolfram. The company owns 32 special licenses for geological survey works, representing an area of nearly 4.68 million hectares.

Another 100% Mongolian owned company that has met near overnight success is Glogex. Established in 2008, it has already been given the title of “Best mining consulting company in the country” by the Minister of Mining.

“Our company’s main purpose is very simple,” says the company’s Executive Director, Batzorig Gantumur. “To solve issues for both local and foreign mining operators in Mongolia on how to extract resources with minimal waste, and in a way that is environmentally friendly and economically sound.” To this aim, Mr. Gantumur explains that the company is careful to use efficient technology and to maintain a balance between project profitability and economic and social benefit to Mongolia.

Making waves in the domain of iron ore is Zasag Chandmani Mines. Buyanbal Damdin, the company’s 35-year-old CEO, explains that water is critical to the mining process, especially in the dry region of the Gobi area where most of its mines are located. “We are reusing the water in our mines up to 90% and this is the highest rate in the country,” says Mr. Damdin.

In a bid to maximize its iron ore processing output, the company is transitioning from a dry to a wet production method that will boost the enrichment level of its products to more than 65%. Two new processing plants financed with the help of foreign investment will also increase the company’s ability to export more to its voracious neighbor and consumer of iron ore, China.

A very politically stable democracy with a well-educated and industrious young workforce committed to capitalizing on its rich natural resources in the most sustainable way possible, Mongolia presents a unique opportunity for investment.