This study is based on field work undertaken in the Spring of 2003 and builds on previous projects undertaken by the World Bank in Mongolia ^[1]. It assesses the medium-term growth potential of Mongolia's non-fuel minerals industry and its potential contribution to economic growth, poverty reduction, and regional development. The study evaluates the current state of the mining sector to identify favorable factors for development and potential constraints, review investor perceptions and international case studies of best practice on how to address these constraints, and recommends options for government actions to improve industry management and the investment climate.

Its main objectives are to:

• Assess the medium-term growth potential of Mongolia's non-fuel minerals industry and SME supply chain linkages, and their contribution to gross domestic product, economic targets, and regional development;
• Diagnose the state of the Mongolian mining sector and identify problems, constraints and bottlenecks to new investment, growth and increased contribution of mining to the national and regional economy;
• Provide international comparisons and examples of best practices as to how other countries have addressed the issues, problems and constraints that are identified; and
• Formulate possible options and alternatives that may be considered by the government to improve efficiency, competitiveness, sector management, and the investment climate.

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This report presents the findings of a study "Mongolia Mining Sector Sources of Growth" undertaken by the Oil, Gas, Mining and Chemicals Department of the World Bank. The review was sponsored by the East Asia and Pacific Poverty Reduction and Economic Management department to contribute towards a proposed Country Economic Memorandum on the sources of growth in Mongolia.

More Information
 A Review of Environmental and Social Impacts in the Mining Sector

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^[1] Previous bank operations in Mongolia include, stabilizing operations at Erdernet Copper, rehabilitating Baganuur Coal Mine, reforming the legal/regulatory framework, and various initiatives to promote investment in the mining sector. Issues related to the environment are not dealt with in this survey and reference is made to work undertaken by the World Bank Group in 2003, specifically the draft ‘Review of the Environmental and Social Policies Practices for Mining in Mongolia’ (World Bank) and the Mining and Petroleum Sector Profile prepared for the Mongolia Investors’ Forum (IFC).