The World Bank Report No: ISR13820 Implementation Status & Results Mongolia Mongolia Mining Sector Technical Assistance Project (P108768) Public Disclosure Copy Operation Name: Mongolia Mining Sector Technical Assistance Project Project Stage: Implementation Seq.No: 6 Status: ARCHIVED Archive Date: 05-May-2014 (P108768) Country: Mongolia Approval FY: 2008 Product Line: IBRD/IDA Region: EAST ASIA AND PACIFIC Lending Instrument: Technical Assistance Loan Implementing Agency(ies): Key Dates Board Approval Date 26-Jun-2008 Original Closing Date 31-Dec-2012 Planned Mid Term Review Date 15-Jul-2010 Last Archived ISR Date 25-Dec-2013 Effectiveness Date 04-May-2009 Revised Closing Date 31-Mar-2015 Actual Mid Term Review Date 01-Nov-2011 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project’s objective is to establish key pieces of the policy, fiscal, legal, regulatory and institutional framework for the mining and extractive sector that meets the needs of the public sector, industry, and civil society. Has the Project Development Objective been changed since Board Approval of the Project? ● Yes No Component(s) Component Name Component Cost Strengthening capacity to manage mining revenues 4.10 Improving regulatory capacity to manage mining sector development 3.00 Development of capacity to manage State Equity 1.40 Project Management 0.80 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Implementation Status Overview A Level-1 Project Restructuring was approved on January 10, 2014. The Restructuring extended the closing date to March 31, 2015 and revised the Project Development Objective, together with other related modifications. It is anticipated that the 15-month extension will enable the Project to come closer to achieving its objectives. The restructured Project better reflects the priorities and linkages between Project activities and outcomes, and better aligns with its technical assistance nature. Page 1 of 8 The World Bank Report No: ISR13820 All remaining project activities are in the advanced stages of procurement and it is expected that all activities will be delivered by the end of 2014, and funds will be fully disbursed by the closing date. Public Disclosure Copy Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Annual Budget decisions to replenish or Text Value None No action required Criteria agreed and withdraw from newly established Sovereign implemented in Budget Wealth Fund are made based on agreed framework for 2012 Budget Macroeconomic criteria Date 26-Jun-2009 11-Mar-2014 31-Dec-2013 Comments SWF dialogue continues with support from IMF and MSTAP Spending levels for basic services to Aimags Text Value Not currently disclosed Some disclosure Disclosed and discussed/ disclosed publicly monitored by citizen groups/ civil society Date 26-Jun-2009 11-Mar-2014 31-Dec-2013 Comments Project is not directly involved in this dialogue Mining Tax Audits are completed and Text Value none currently In progress Minimum of two audits assessments raised completed Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Capacity building and preparation of manuals ongoing. Some audits taking place Public Disclosure Copy Clear authority and responsibilities for Text Value Roles confused resulting in 22. The functional Institutional roles clarified in Government mining sector management gaps and conflicts management review of the line with clearly stated institutions, especially regarding environmental MoM has been completed regulations.regulations. and social aspects associated with mining and the report shared with the activities. Bank Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Page 2 of 8 The World Bank Report No: ISR13820 mineral licensing procedures streamlined and Text Value 4-6 months The new Mining Cadastre 2 months processing times reduced system is completed and ready to go live online. Public Disclosure Copy Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Until moratorium is lifted it will not be possible to evaluate typical processing time. Geological information is digitized and Text Value very limited, no digital The earlier restriction on 200,000 data points digitised published and readily available in user friendly geochemistry disclosure of geological data digital formats. remains in place and there is currently no clear solution to lift this restriction. Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Companies and civil society participate in Text Value No data availabe. Consultation process for Consultations taking place for consultation for pieces of legislation and Mining Law took place as well policy, each piece of regulation for mining sector through public fora as for Mining Policy; legislation and regulation. arranged by the government. amendements for mining law are under consultation currently Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments No comprehensive surveying has been undertaken. MSISTAP has funded consultation with key stakeholders over new legislation. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Sovereign Wealth Fund or alternative revenue Text Value Mongolian Development Fund This activity is fully completed. New Fund Operational Public Disclosure Copy stabilisation mechanism established in place but deficient without defined operating criteria Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Support establishment of mechanisms for Text Value No policy unit serving Prime After approval of project Produce first report preparation and dissemination of independent Minister restructuring, selection of professional mining sector economic and Institute is being compelted policyreports. Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Page 3 of 8 The World Bank Report No: ISR13820 Comments Activity on track to complete by project closure but is limited to specific reports requested by MoM Public Disclosure Copy Modern Mining cadastre regulation adopted Text Value Regulations under preparation The new Mining Cadastre Companies confirm improved and promulgated system is completed and cadastre operations and ready to go live online. reduced processing times Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Regulations will be updated following amendments to Mining Law. Preparation of Draft Model Mineral Text Value First draft prepared This activity will not be Draft Model Agreement Development Agreement delivered under the project consistent with International due to time delays. best practice adopted and utilised Date 26-Jun-2009 11-Mar-2014 31-Dec-2013 Comments Given delays in delivering the new Mining Law and that all funds are committed this activity cannot be delivered under the project.MoM requested separate support from WB which is pending review. Income tax laws on mining amended and Text Value Income tax law for mining Partially completed, but Final modifications to tax laws supporting regulations drafted deficient update is required. submitted to Parliament for consideration. Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Investment code was revised in late 2013 and added fiscal stabilization provision. Public Disclosure Copy Options study prepared on double taxation Text Value Treaties exist but Government Completed Options for review of Tax treaties dissatisfied with operations treaties prepared and decisions taken in next steps to resolve any issues Date 26-Jun-2009 11-Mar-2014 31-Dec-2013 Comments GDNT tax audit staff trained and competent to Text Value no staff trained to Partially completed. Final 10 staff trained of which 2 are carry out mining company tax audits international standards consultancy to prepare leading mining tax audits handbooks is in contracting stage. Page 4 of 8 The World Bank Report No: ISR13820 Date 26-Jun-2009 11-Mar-2014 31-Mar-2015 Comments Expected to be completed on time by project completion Public Disclosure Copy Ministry of Mining policies reviewed and Text Value Some work has been Completed Government adopts revised undertaken to review the recommendations in the form Ministry’s strategic of policy statements. communications plan. MSISTAP has also funded advice on how to bestdevelop the mining industry, including opportunities for downstream processing in Mongolia. Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments new Mining Policy adopted in January 2014. Amendment to Mining Law is in process to bring it in line with policy Modern company reporting requirements Text Value Reporting exists in regulations pending Mining Law update Reporting requirements regulations are prepared, promulgated, but needs modifications and regulations are prepared, implemented, and monitored follow up promulgated, implemented, and monitored Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments Modern occupation, health and safety Text Value Regulations exist but require Due to delays in passing the Legislation passed, regulations are prepared, promulgated, update and modernization new Mining Law, it will not be authorities actively monitoring implemented and monitored. possible to delivery this health and safety practices activtity during the project life. based on new regulations. Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments Delivery of the activity will be taken up by parallel donor funding. Public Disclosure Copy Strategic environmental & social assessment Text Value Limited The SESA is progressing Results presented, undertaken, areas for improvement in social according to schedule. There Government responding to (including gender) & environmental regulation are some limitations on data key findings identified, recommendations made for updating availability for GIS analysis laws which are now being addressed with the assistance of MoGD and MoM. The second round of consultations iwill take place in the spring. Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Page 5 of 8 The World Bank Report No: ISR13820 Comments No systematic review of Government adopted new legislation governing regulation of SEA in late environmental/ social impacts 2013. undertaken. Public Disclosure Copy Consultation with a range of stakeholders Text Value Limited New guidelines on SESA Consultation process including civil society, community members consultations are adopted by completed. Working local and the private sector undertaken as part of Ministry of Env and Green engagement tools (models) asocial and environmental strategic Devt. evolved assessment process. Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments A range of stakeholders Regulation adopted in Nov dissatisfied with engagement 2013 and no evidence or mechanism, government track record of its approaches to implementation yet consultation. Modern mine closure and post closure Text Value law and regulations require Partially completed. Modern mine closure and regulations are prepared and promulgated closure planning but no Research and post closure regulations are specific regulation recommendations delivered prepared and promulgated by MSISTAP and German support project by BGR. Regulations under preparation by Ministry of Environment Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments MSISTAP will track this indicator further even though it is outside of its direct support. Erdenes MGL financial reports are provided Text Value not systemic reporting Completed. EMGL strategy, Financial reports are provided quarterly to the Board of Directors. statutes and reporting being quarterly to the Board of updated. Current reporting is Directors. Quarterly Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Public Disclosure Copy Comments Establishment of appropriate legal structure Text Value EMGL was established in Initial charter and regulations Appropriate legal structure and preparation and adoption of suitable 2007 completed in 2009; update is and preparation and adoption corporate charter and reporting arrangements taking place in 2014 of suitable corporate charter for Erdenes MGL and reporting arrangements in place. Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments Update is required based on changing mandate of EMGL Page 6 of 8 The World Bank Report No: ISR13820 Provision of management-related and Text Value no systemic capacity building Completed. Project provided Management-related and governance related training events to build capacity building and training governance related training capabilities needed within Erdenes MGL. event provided Public Disclosure Copy Date 28-Mar-2014 11-Mar-2014 31-Mar-2015 Comments Data on Financial Performance (as of 27-Mar-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P108768 IDA-44890 Effective 26-Jun-2008 07-Oct-2008 04-May-2009 31-Dec-2012 31-Mar-2015 P108768 IDA-H4110 Effective 26-Jun-2008 07-Oct-2008 04-May-2009 31-Dec-2012 31-Mar-2015 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P108768 IDA-44890 Effective XDR 3.15 3.15 0.00 2.07 1.08 66.00 P108768 IDA-H4110 Effective XDR 2.57 2.57 0.00 2.38 0.19 92.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation Page 7 of 8 The World Bank Report No: ISR13820 A Level-1 Restructuring was finalized on January 10, 2014. The Restructuring Paper, dated December 18, 2013, and the updated ISDS are publicly available. Restructuring History Public Disclosure Copy Level two Approved on 05-Jul-2012 Related Projects There are no related projects. Public Disclosure Copy Page 8 of 8