Participants to last Thursday’s conference on methods to export mining products agreed about the need to follow international practices. They also felt it would be better to negotiate prices than to stick to one initially quoted - an intransigence which could result in negative effects.

Nevertheless, representatives of the mining companies and tax authority officials disagreed on the export tax policy. Currently, mining companies have to pay a 5% tax on their product export value, but many complain that the tax authority often calculates the value arbitrarily, not taking into account several costs usually exempted in international practice, thus causing losses for the exporting companies.

But the tax authorities rejected the mining companies’ claims, saying they only operate for profit, and as a result, try to pay as little tax as possible. Some observers present during the conference agreed with that statement, saying mine usage fees should not be seen as a tax. According to D. Chilkhaajav, expert from the General Authority for Professional Monitoring, the companies must pay the 5% fee, no matter what the cost of production was.

Mining companies also criticized the Government for not amending the 88th protocol according to which only the Central Customs Laboratory is authorized to analyze the ore to be exported. Miners felt this can be done in the special laboratories located in the Erdenet and Tsairtmeneral factories. They also urged MPs to amend, on practical considerations, the 2009 environmental law prohibiting exploration and excavation near forests, water sources, and protected regions; and to make a statutory practice of seeking the views of professionals, academic institutions, and business entities before taking important decisions in the minerals sector.

Meanwhile, mining companies were asked to carry out appropriate restoration work in areas damaged by mining; to show social responsibility and work closely with local communities and administrations; and to abide by the principles of responsible mining and the recommendations of the extractive industry transparency initiative.