The mining sector is regarded as the major contributor to the Mongolian economy and the backbone of the country’s real GDP growth. For the last 5-6 years mining industry has been a main driver of the economic growth, which has averaged over 7 percent per annum. The industry’s share in the total GDP tripled in just 5 years, increasing from 10 percent in 2002 to 33 percent in 2007. In addition, it produces 70.39% of Gross Industrial product. Currently, Mongolia’s mining and minerals sector generates more than three quarters of its total export revenues, and employs more than 42 thousand people, which accounts for around 4 percent of the total labor force.

Mongolia’s vast territory has a great potential to have rich mineral deposits including gold, copper, coal, fluorspar, silver, uranium, but, owing to poor infrastructure, only about 15% of its total area has been fully mapped to date. It has a range of potential world-class mineral deposits, and has already yielded deposits of copper, coke and coal. Many analysts predict that significant deposits of uranium, gold, silver, lead and a number of other minerals may also exist. The country has attracted considerable investment in exploration in recent years. Foreign investors in geology, mining and petroleum industries are increasing and by the end of 2006, about 52.14 percent of the total foreign investors were from China while 27.92 percent was from Canada.  

In the past decade, the Government of Mongolia has evolved from being predominantly the owner and operator of mines to being a manager and regulator. This transformation required setting in place a legal framework adequate to guarantee an environmentally sustainable growth of the sector.  Currently, Mongolia is experiencing a boom of its mining sector which brings new opportunities as well as major risks. The jewel in the crown of Mongolia’s discovered deposits is the Oyu Tolgoi project in southern Mongolia, which is often credited as being the largest undeveloped copper-gold project in the world. If this project is successfully developed, the GDP of Mongolia could double in a relatively short period of time. In this respect, Mongolian Government is in the process of concluding its investment agreements.