The Mongolian Prime Minister, His Excellency Mr Sukhbaatar Batbold’s address at the 2011 Mongolia Australia Business Forum in Sydney
21 February 2011
Duration: 16 min. 40 sec.
Speaker: His Excellency Mr Sukhbaatar Batbold, Mongolian Prime Minister
Prime Minister Sukhbaatar Batbold: Esteemed Peter Grey, esteemed participants, ladies and gentlemen, good morning to all of you. So today basically I’m starting my visit to Australia and this would be the first ever visit of the Mongolian Prime Minister to your nice country and I am especially honoured to start this visit from this important event, with this important event, and it is my honour and privilege to speak to you, to the business community from Australia and of course with the business community from Mongolia.
I would like to introduce a few members of my delegation here. Within my delegation I have got a number of members of the parliament from Mongolia. We have a coalition government in Mongolia and it consists of the members from two major parties in Mongolia. Although one of the parties has got the majority of the seats but again, with the interest and commitment for the development of my country the major parties have agreed to establish the coalition government with the view to move forward those major economic projects which provide unique opportunity for the development of my country and Mr Gankhuyag, Member of the Mongolian Parliament from the Democratic Party; Mr Batbold, Mongolian People’s Party representative I think who’s joining now to this conference; I have members of my cabinet today – the Minister of Education of Mongolia, Mr Otgonbayar and Vice Minister of Agriculture and Member of the Parliament from the Mongolian People’s Party again, Mr Dorjdamba Damba-Ochir who is also and experienced businessman, especially in mining; and distinguished dignitaries and officials from the Mongolian Foreign Ministry and from other relevant agencies. We also have a number of Mongolian business representatives with whom I would think that they would ... establish good relations and efficient talk which would increase the bilateral understanding between our two countries and between the business, and this is the most important thing and the aim of this meeting.
I am also very honoured to see a good turnout and interest from the Australian business community and I am very, as I said, honoured to speak to you about Mongolia and our policy in terms of the foreign investment and the opportunities we think that we could provide to our partners and investors and equally importantly to our interest of my country and the interest of the citizens of Mongolia.
I think we had a number of forums and discussions with the Australian business community and as I understand we had last year a successful international investment forum on the Mongolian mining sector in Sydney.
There are a lot of common things between our two countries. Mongolia has relatively vast land like Australia, although Australia has much more land than Mongolia but we, like Australia, also are blessed with abundant natural resources and I think we are lucky countries in that sense and both countries have the same economic path that two important sectors of the economy are very key for our development. First of all is the mining, and on top of that we have a strong agriculture and especially in Mongolia we have animal husbandry.
We are very proud and we know that you have made impressive achievements in the establishment of the modern and ecologically sound mining and modernised agriculture in Australia, and we want to learn from your good experience and we would like you to share your good experience for the development of Mongolia and hopefully this would server to the best interests and for the mutual benefit of both countries and especially to the interests of the investors. So our countries can complement each other in many ways and have a common agenda on the international market for many of those sectors.
We have less than 20 years of history of modern commercial mining in Mongolia but already several world class deposits have been found and large mineral deposits have put Mongolia on the mining world stage and are staging to start producing a substantial amount of copper and coal in the first hand. But we think that we are not building mines in Mongolia, we are building a mining country like Australia and Chile.
Different international institutions and especially the IMF forecasts that Mongolia will be one of the fastest growing economies in the region and possibly globally over the next five years and decades. So economic growth of such magnitude will require sustained and concerted action over a period of years, well thought, planned and executed investments are the key to this growth.
Creation of a favourable business and investment environment, proper economic policies, planning and close cooperation with the private capital are the key to realising this growth, thus attracting investment to Mongolia will be critical in achieving our development goals.
Those rich mineral resources and favourable location next to the world’s largest consumer of commodities presents unique opportunities to investors, especially from countries like Australia which has a unique experience also in mining.
At the same time we face extraordinary challenges to build infrastructure, to support those world class mines and also have access to the sea and important markets. It is a difficult and challenging task for Mongolia but the opportunity and political will are there to solve those tasks.
We are mindful that we will need to undergo years and maybe decades of systematic and modern exploration similar to what resource rich countries like Canada or Australia undertook. So the government policies focus the development for the people and the people for the development, so this certainly attributes sustainable growth.
Mongolia is highly vulnerable in ecological terms, therefore it becomes a challenge for us to effectively exploit the natural resources in a sustainable manner since the mining sector accounts for 30% of our GDP and almost 80% of our total export. So therefore we put the priority to shift from brown economy, so called, to the green economy through the introduction of green investment, environmentally sound technologies for development of mining and infrastructure which especially Australia has got.
Yesterday I and my delegation visited the Hunter Valley to see the coal operation there by extractor and we were very impressed with the ecologically sound approach of this operation. Government is pursuing the policy of diversifying the economy beyond the primary extractor industry phase by establishing the processing industry to create benefits and added value while increasing job creation and opportunities for our citizens. Mongolian Parliament also in support of those government policies and have approved major policy papers for the government, and Parliament also has adopted law on concessions which provides private sector and private investors with opportunities to invest in major mining developments and especially in infrastructures through PPP (Public Private Partnership). In order to support also infrastructure development from the government point of view the Development Bank was established recently to assist the financing of these major infrastructure needs.
Today Mongolia as a foreign investment destination I think [is] quite interesting and Mongolia is making efforts to create a clear, stable and predictable environment for investment. We have one of the most attractive and competitive fiscal regimes in the world to attract investment. So many Australian companies already have experienced working in Mongolia and do understand the environment there, so I hope that you would hear more concretely about the investment environment from my colleagues and from business representatives who have got experience doing business in Mongolia later.
As a result of the foreign direct investment in mining as a result of those favourable policies, the foreign direct investment in the mining sector has increased substantially and now it constitutes more than 60% of the foreign direct investments into Mongolia.
The project of the Oyu Tolgio, one of the world’s largest copper and gold deposits, is being developed with joint involvement with Canadian company Ivanhoe Mines and Anglo-Australian Rio Tinto in partnership with the Mongolian Government.
There is a second multi-billion project which is called Tavan Tolgoi Mine which has got almost seven billion tonnes of coal out of which about almost two billion tonnes of coking coal is the world’s largest unexploited coal deposit that is owned by the government of Mongolia and we would like to bring into production this unique deposit. We have announced an international tender for development of this mine for financial institutions and for international operators and investors.
Mongolia to this day has got more than a thousand and almost 200 deposits which are detected and have got the gold, silver, copper, coal, molybdenum, uranium, zinc, etc. So we are certain that based on appropriate use of those massive natural resources Mongolia can sustain high growth rates and deliver prosperity to our people, to our country, and human development and opportunities to all citizens of Mongolia.
Last year Mongolia officially joined the ranks of the oil and energy exploiting countries. With only limited exploration to date our reserves of oil are now estimated as thirty-third in the world and large enough to satisfy our domestic needs for almost 100 years, but more importantly with much larger potentials for export.
In terms of energy supplies Mongolia now has the full spectrum of energy projects, including coal, oil and uranium. We’re actively promoting the listing of Mongolian projects on international stock exchanges and while the government itself is planning to enter these markets to finance the major state-owned enterprises and their associated infrastructure and mineral developments. So we would very much welcome your interest to this end for cooperation.
Ladies and gentlemen, I am confident that this forum will boost interaction, expanding beneficial business relations and helping business communities to identify areas of common interest. I would encourage chambers of commerce of [our] two countries to set up regular mechanisms of meeting and interactions like business councils. So lastly I would like, or again, to welcome you, all of you, to visit Mongolia. I know that many of you have been to Mongolia but I would like to extend my sincere invitation to all of you to visit Mongolia to see the opportunities by your own eyes and to have fruitful cooperation with Mongolia. So I wish you fruitful discussions today and rewarding outcomes. Thank you.