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

In many regions of Mongolia there are vast untapped mineral resources, especially gold and copper. Together with its Mongolian partners, a German initiative is introducing governance, social and environmental standards in the extractive industries sector and helping to train specialists in sustainable mining. This mineral wealth can then be used to bring about sustainable improvements in the lives of the Mongolian people.

Mongolia has huge deposits of minerals, including copper, gold and coal. Mineral resources already account for some 80 per cent of this Central Asian country’s export income, and its mining sector makes up 20 per cent of GDP. Yet despite these statistics, Mongolia is still struggling with the typical problem scenario of a mineral-rich developing nation in that it lacks skilled workers and managers and fails to offer reliable conditions for investors. Moreover, it also needs to elaborate strategies for the rollout of governance, social and environmental standards in the mining sector.

In response to these challenges, three German federal ministries – the Federal Ministry for Economic Cooperation and Development (BMZ), the Federal Foreign Office (AA) and the Federal Ministry for Economic Affairs and Energy (BMWi) – are working together in partnership as part of the Integrated Mineral Resources Initiative. Within the scope of this initiative, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is supporting its Mongolian partner institutions in exploiting the country’s mineral wealth more sustainably. Furthermore, experts from Germany's National Metrology Institute (PTB) and from the Federal Institute for Geosciences and Natural Resources (BGR) and private sector are also involved in project activities.

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Skilled workers – today and tomorrow

As part of its activities, GIZ is developing the skills of and providing training for staff employed in Mongolia's ministries, specialist authorities and government institutions. In cooperation with German and international consulting companies, it has already coached around 400 employees, empowering them to better evaluate the technical and economic factors that accompany a decision to invest in mining. Moreover, they have also learned how to evaluate mineral deposits more accurately and to negotiate and draft framework conditions, legislation and extraction contracts.

To ensure demand for skilled workers can also be met in future, the German-Mongolian University for Resources and Technology was set up in Ulan Bator in 2013. With its first intake of students scheduled to graduate in the summer of 2018, this university is intended to intensify cooperation between German and Mongolian education facilities and companies and to foster practice-oriented dual university education in the mineral extraction sector.

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Local suppliers, modern work safety standards

Awareness-raising measures on topics such as socially responsible corporate management, work safety, and gender and human rights issues are focusing in particular on Mongolian mining companies. To date, around 40 per cent of the 150 larger-scale companies have now incorporated them into their business operations. Furthermore, national and international experts have also advised and coached around 100 smaller and medium-sized companies on GIZ's behalf, some 30 per cent of which are currently operating as local and/or regional suppliers for the mining industry, creating several hundred new jobs and boosting the manufacture of local products in the process.

In contrast to many other emerging economies and developing countries, Mongolia also reached another milestone on the road to sustainable mining in 2010 when it achieved full compliance with the international Extractive Industries Transparency Initiative (EITI). This means Mongolia is taking a stand against corruption and mismanagement by disclosing what the government earns from mineral extraction and stating how the funds are used.

A key focus of the initiative is on modernising and developing occupational health and safety standards. Working closely with the German accident insurance company DGUV, the Mongolian Ministry of Labour is developing state-of-the-art work safety standards for the mining industry. Thanks to the initiative, Mongolia now boasts a modernised central laboratory for occupational medicine and has adopted German standards for exposure to dust, noise and workplace vibrations in the mining industry.

 

Last update: August 2017