Landscape with meadows in the foreground, slag-heaps in the background Landscape with meadows in the foreground, slag-heaps in the background

Economic development and employment

Harnessing mineral wealth – also for the benefit of the Mongolian people

With Germany's support, Mongolia is using its abundant natural resources sustainably.

Harnessing mineral wealth – also for the benefit of the Mongolian people

Mongolia has huge deposits of mineral resources, which account for almost 90 per cent of the country’s export earnings. The mining sector generates around one quarter of the gross domestic product (GDP). If this mineral wealth is to be used to bring about long-term improvements in people’s living conditions, skilled workers and managers must be trained and the supply industry must be made more competitive. The state’s negotiating capabilities have to be improved and strategies established for rolling out governance, social and environmental standards in the mining sector that will create a regulatory framework for investors.

To address these challenges, the German Federal Ministry for Economic Cooperation and Development (BMZ) supports the Mongolian partner institutions and the private sector in exploiting the mineral wealth more sustainably. The following organisations are involved in implementing the programme: Germany's National Metrology Institute (PTB), the Federal Institute for Geosciences and Natural Resources (BGR), the Kreditanstalt für Wiederaufbau (KfW) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

Skilled workers – today and tomorrow

As part of the programme, GIZ is developing the skills of and providing training for staff employed in Mongolia's ministries, specialist authorities, government institutions and civil society organisations. In cooperation with German, international and Mongolian consulting companies, it has already trained around 800 employees at these institutions in driving forward local economic development in cooperation with mining companies, and thus localising the profits from mining. In addition, GIZ will advise the Mongolian Government on preparing and appraising large-volume contracts in the raw materials sector.

To ensure that demand for skilled workers can continue to be met in future, the German-Mongolian Institute for Resources and Technology has been founded in Nalaikh. Since its first intake of students graduated in 2018, 25 students have completed their degrees. All the graduates are now either working as specialists in Mongolian companies or have begun studying for a master’s degree. The Institute is intended to intensify cooperation between German and Mongolian education facilities and companies and to foster practical university education in the mineral extraction sector modelled on a German-style university of applied sciences.

Furthermore, seven competence centres are receiving support in offering specialised training in technical occupations. To date about 2,100 trainees have attended the revised training courses. Another focus is on setting up a qualification system for teachers at vocational schools. Around 1,000 of them have participated in training measures to acquire technical and pedagogic skills.

Local suppliers, modern work safety standards

In addition, awareness-raising measures are being carried out in particular for suppliers to mining companies in Mongolia, to sensitise them to topics such as socially responsible corporate management, occupational health and safety, environmental compatibility, gender, human rights and integrity. During the last two years more than 2,000 employees at companies, primarily mining-sector suppliers, have received training in managing their companies profitably in an ecologically sound and socially sustainable manner under good working conditions. The programme has also assisted about one hundred Mongolian firms in concluding supply contracts with mining firms. As a result, several hundred jobs have been either secured or created, and local production has been boosted. GIZ is also supporting the Mongolian Government’s current reform efforts to attract foreign investors through the ‘Invest in Mongolia’ centre.

To reduce the incidence of lung disease, the project also supports the implementation of Mongolian standards regulating particulate matter in order to protect workers in coal mines. It provides training for specialists at state inspection and occupational safety authorities, and at mining companies, so that levels of particulates can be measured in accordance with international good practice, and action can be taken to reduce the levels. 

In contrast to many other emerging economies and developing countries, Mongolia achieved full compliance with the international Extractive Industries Transparency Initiative (EITI) as early as 2010. In 2017, EITI also certified that Mongolia discloses what the Government earns from mineral extraction and how this income is used.

Last revised: March 2020 

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