Ulaanbaatar
Mining Sector Requests Extension on New Royalty Calculation Method
Politics
Ulaanbaatar, August 29, 2025 /MONTSAME/. Prime Minister of Mongolia Zandanshatar Gombojav held a meeting with key representatives of the mining sector.
The Government of Mongolia has revised the methodology for calculating Mineral Resource Royalties (MRRL), opting to base MRRL on the trading prices listed on the Mining Commodity Exchange or the Mongolian Stock Exchange (MSE). This change was prompted by concerns that, under the previous methodology, mining enterprises were being taxed at rates exceeding their actual sales prices, creating significant financial pressure. For instance, the prices used to calculate royalties for enriched coking coal, fluorspar 54.3 percent, and iron ore were on average 22.6 percent higher than their actual market prices, according to the Minister of Mining and Heavy Industry (MMHI), Damdinnyam Gongor.
MRRL was previously calculated based on international reference prices, which benefited companies during periods of high raw material prices. However, when prices declined, enterprises faced financial losses and were forced to suspend operations. Enkhbat Dorjpalam, Director of Energy Resources LLC, expressed appreciation for the government’s shift toward calculating MRRLs based on actual exchange prices. He also requested that the implementation of this revised methodology be extended further.
The government’s decision to adopt the new MRRL calculation method will remain in effect until the end of the year. Meanwhile, Byambadagva Bayaraa, President of the Mongolian Coal Association, proposed that MRRLs also be applied to other types of coal not currently traded on the exchange.
Under the revised methodology for calculating MRRL, enterprises that trade at least 25 percent of their products on the exchange will be required to calculate the value of their entire output based on prices listed on the MSE. This policy is expected to boost exchange-based trading and generate an estimated MNT 100 billion in additional revenue for the state budget in accordance with the projection by the MMHI. Meanwhile, Mandakhbayar Doljinsuren, Executive Director of Gan Khuder Ord LLC, raised concerns about the issue of double MRRL collection and urged the government to pay special attention to the challenges faced by entrepreneurs in the mining sector.
In response, the prime minister has instructed the Ministry of Finance to review the proposal from Mandakhbayar Doljinsuren of Gan Khuder Ord LLC and assess potential solutions.
