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Improving the policy framework for financial assurance for mine closure in Mongolia

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  • Zandariya, Bayanmunkh

Abstract

Mongolia is rich in mineral resources. Its economy is based on mining. As of 2020, mineral licenses for 1.65 million hectares have been issued in Mongolia, which represent 1% of the country's territory. Mining involves a great negative impact on the environment and society in mining areas not only during mining operations but also after mines are closed. To avoid such impacts on the environment and local communities, it is imperative to secure funds for appropriate mine closure. Therefore, adequate policy and regulatory frameworks for mine closure, including financial assurance for mine closure, are key to ensuring proper mine closure and minimizing negative environmental, health and safety impacts that may result from inadequate mine closure or abandoned mines. Our comparative study on financial assurance for mine closure, based on the internationally-applied guidelines, show that Mongolia's current legal framework regulating mining activities includes only a minimum level of requirements for mine closure and thus represents a policy and regulatory weakness that may lead to inadequate mine closure, or abandoning mines without proper closure.

Suggested Citation

  • Zandariya, Bayanmunkh, 2022. "Improving the policy framework for financial assurance for mine closure in Mongolia," Resources Policy, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:jrpoli:v:77:y:2022:i:c:s0301420722000770
    DOI: 10.1016/j.resourpol.2022.102628
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    References listed on IDEAS

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    1. Peck, Philip & Sinding, Knud, 2009. "Financial assurance and mine closure: Stakeholder expectations and effects on operating decisions," Resources Policy, Elsevier, vol. 34(4), pages 227-233, December.
    2. Baatarzorig, Tsolmon & Galindev, Ragchaasuren & Maisonnave, Hélène, 2018. "Effects of ups and downs of the Mongolian mining sector," Environment and Development Economics, Cambridge University Press, vol. 23(5), pages 527-542, October.
    3. Goh, Eric & Effendi, Shahar, 2017. "Overview of an effective governance policy for mineral resource sustainability in Malaysia," Resources Policy, Elsevier, vol. 52(C), pages 1-6.
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    More about this item

    Keywords

    Financial assurance; Mine closure cost estimation; Mining legal framework; Mongolia;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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