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Events
S. Bayar: "A 9% Royalty on Uranium Doesn’t Exist in Global Practice" www.gogo.mn
At today’s parliamentary session, discussions continued on amendments to the Nuclear Energy Law. The initial reading took place last week, and yesterday, the Standing Committee on Security and Foreign Policy reviewed the proposed changes. MP Ts. Davaasuren put forward a proposal to set a 9% royalty (known as AMNAT) on projects involving the extraction and processing of radioactive minerals.
Most committee members supported this suggestion. However, Minister of Industry and Minerals Ts. Tuvaan warned that if a 9% royalty is enforced, negotiations on the Investment Agreement with France's Orano Group could be halted. The agreement would establish the legal framework needed to operate the Mongolian-French joint Zuuvch-Ovoo uranium project.
Former Prime Minister S. Bayar criticized the proposal on Twitter, warning, "Hiding poor intentions and personal interests behind patriotic phrases like ‘Don’t betray your country’ is a familiar tactic. This Ts. Davaasuren has pushed through support for a ‘9% royalty’ that doesn’t exist in global uranium practice. Remember, fellow Mongolians, with this, foreign investment will stop. Later, Davaasuren will likely say, ‘I did this for our people.’ This was also the case with Oyu Tolgoi, do you recall what was said then?"
MP P. Sainzorig stated that the global average royalty for uranium mining is 3-5%, whereas Mongolia’s rate could reach 14%, and even up to 19% if prices increase, equating to discouraging investment in the country. He emphasized that a working group should provide a clear answer on this issue.
Finance Minister B. Javkhlan clarified that 65% of the AMNAT collected would go to the Future Heritage Fund, with 35% allocated to the Local Development Fund, which could significantly boost local development if the project succeeds.
MP B. Purevdorj noted that the global average AMNAT for uranium is around 5.5%, with Kazakhstan, which has the largest uranium reserves, applying a 6% rate, while Australia, Canada, and Nigeria each set 5%, and Uzbekistan sets 8%.
The draft law classifies royalties on radioactive mineral resources based on market prices, ranging from $0 to $130, with rates set at 0-9%. Three types of AMNAT have been defined: base, incremental, and special, with incremental rates applying only if the market price exceeds $50 per pound.
Translated by ChatGPT
Published Date:2024-11-14
