The Mongolian Parliament enacted the Law on Mineral Commodity Exchange during its regular session on December 23, 2022.The law will be effective from July 1, 2023. An initial trial run will be carried out at “Erdenes Tavan Tolgoi” SOE (ETT) starting from January 1. A temporary regulation is in place for ETT to sell coal on short-term contracts. The buyer shall pay in advance. If the coal cannot be supplied within one month, ETT shall pay a 0.1 percent penalty under the temporary regulation. The supplier shall announce the base price. When establishing a 6-month special regime at ETT by Resolution No. 362, the Government has set an obligation for the company to trade coal under border conditions. In the future, exchange trading companies will be able to trade coal in containers under border conditions. The Mineral Commodity Exchange will initially trade the products of state-owned companies and will be open to private enterprises.
Currently, among private sector companies, “Energy Resources” has offered to trade coal on the mining exchange. Thus, during the half-year trial, three states, local, and privately owned companies operating in Tavan Tolgoi residual deposits will trade coal at the exchange. When the Law on Mineral Commodity Exchange comes into force, the prices of products will be announced by the Mongolian Stock Exchange. The Financial Regulation Committee will supervise the trade. The first bill on the Mineral Commodity Exchange was submitted in 2015, and three years later, a working group was formed to draft the law for the second time, and the current bill is the 3rd draft. According to the government’s policy document on mineral resources states, “a mineral exchange will be established for mineral sales on foreign and domestic markets in an open, rational, highly efficient manner under market principles, set fair prices, and develop the domestic stock market.”
