Mongolian Parliament finalizes new proposed nuclear energy law and legislation

Densmaa 2024-11-22 05:11

Politics

The Parliament of Mongolia has officially approved the proposed amendments to the Nuclear Energy Law and related legislation.

The Parliament of Mongolia has officially approved the proposed amendments to the Nuclear Energy Law and related legislation. The law now includes provisions to replace the state's mandatory 34% ownership with a Special Royalty on Mineral Resource Utilization (SRMRU) and to convert ordinary shares into preferred shares. Specifically, the SRMRU will consist of base, special, and incremental royalties. The base royalty will be set at 5% of the sales value, while the special royalty, adjusted for deposit characteristics, will also be 5%. Incremental royalties will range from 0% to 9% based on market prices.

By converting ordinary shares into 10% preferred shares, Mongolia avoids financial liabilities while securing priority in dividend payouts. Additionally, investment agreements may now be extended for up to 20 years. A provision has also been introduced to place funds for post-mine closure rehabilitation and restoration in a special foreign currency account at the Bank of Mongolia, ensuring they are used exclusively for their intended purpose.

However, some lawmakers criticized the law for lacking detailed regulations regarding environmental protection, water use, and waste management, emphasizing the need to address these issues during contract negotiations.

Following the adoption of the law, the next steps will involve discussions on investment agreements. According to the Chief of the Cabinet Secretariat, the Parliament will review these agreements. The Minister of the relevant sector announced plans to finalize an agreement with Orano Mining by January 2025.