The Australian government and coal in Mongolia

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As the mineral potential of Mongolia, the Australian government has sought to open doors for Australian-based mining companies, including major new coal projects. According to an Australian government backgrounder, coal exports account for approximately 7% of the value of the country's exports. Exports, particularly of minerals, account for approximately half the the country's US$5.8 billion gross domestic product.

The Department of Foreign Affairs and Trade states that "Australian companies are well placed to assist in the development of Mongolia's resources sector. On 25 August 2009, the Mongolian Parliament approved legislation – including the repeal of a Windfall Profits Tax, effective 1 January 2011 – that should help to create a more certain environment for prospective investors." Aside from the Oyu Tolgoi copper and gold mine, which is being developed by Rio Tinto and Ivanhoe Mines, the department states that "Leighton Holdings Limited also has extensive interests in the Mongolian mining sector, including a contract to provide mining services to a tenement of the Tavan Tolgoi coal deposit, said to be the world's largest undeveloped coking coal deposit."

Prime Minister Batbold visits Australia, February 2011

In late February 2011, Mongolian Prime Minister Sukhbaatar Bathbold had a four day visit to Australia. A joint statement from Bathbold and Australian Prime Minister Julia Gillard noted that the two "welcomed the friendly and growing relations between Australia and Mongolia, particularly in the field of minerals and energy. The two leaders noted that the development of major mining projects, including the Oyu Tolgoi copper and gold mine, would promote Mongolia’s economic development while deepening Australia’s commercial ties with Mongolia. They welcomed the increasing interest of the Australian mining industry in sharing its expertise with Mongolia, and the capacity of Australian businesses in the geological, drilling, mining software, environmental management, financial, legal and training sectors to contribute to the development of Mongolia’s minerals and energy sector."

The media release stated that Batbold "welcomed Australia’s assistance in developing a best-practice regulatory and legislative framework to promote the successful and sustainable development of Mongolia’s minerals and energy sector."

At the meeting the two leaders signed four bilateral agreements one of which was a Memorandum of Understanding "on vocational education cooperation aimed at helping Mongolia build the capacity of its mining workforce, encouraging the exchange of vocational education students and staff, and encouraging the exchange of information on education systems, qualifications and recognition processes between vocational education institutes and universities."

Gillard also announced that Australia planned to open a permanent office in Ulaanbaatar in 2011 "in view of the growing number of Australian companies interested in doing business in Mongolia."

The joint statement also stated that "both leaders underscored the importance of national and global efforts to combat climate change. They welcomed the results of the 2010 Cancun Conference of the Parties to the UN Framework Convention on Climate Change and agreed on the need for prompt implementation of the Cancun agreements."

Australia eye Mongolian mining projects

Just prior to Batbold's visit to Australia, the Australian Trade Minister, Craig Emerson, released the Mongolian Mining Projects Report 2011.

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