Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) Mongolia Mining Sector Technical Assistance Project (P108768) EAST ASIA AND PACIFIC | Mongolia | Energy and Mining Global Practice | IBRD/IDA | Technical Assistance Loan | FY 2008 | Seq No: 8 | ARCHIVED on 01-Jun-2015 | ISR18635 | Implementing Agencies: Key Dates Key Project Dates Board Approval date:26-Jun-2008 Effectiveness Date:04-May-2009 Planned Mid Term Review Date:15-Jul-2010 Actual Mid-Term Review Date:01-Nov-2011 Original Closing Date:31-Dec-2012 Revised Closing Date:31-Dec-2015 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective (PDO) for this first phase of support is to assist the Government to develop further the policy,fiscal, legal, regulatory and institutional framework for the mining and extractive sector that meets the needs of government,industry, and civil society. This includes the operation of Erdenes MGL LLC according to good international practice associatedwith a commercial entity. Has the Project Development Objective been changed since Board Approval of the Project Objective? Yes Board Approved Revised Project Development Objective (If project is formally restructured)PHRPDODEL 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. Components Name Strengthening capacity to manage mining revenues:(Cost $4.10 M) Improving regulatory capacity to manage mining sector development:(Cost $3.00 M) Development of capacity to manage State Equity:(Cost $1.40 M) Project Management:(Cost $0.80 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory 6/1/2015 Page 1 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) Overall Risk Rating  --  Substantial Implementation Status and Key Decisions All activities financed by MSISTAP are complete and the project is fully disbursed. Progress towards achieving the PDO and Overall Implementation Progress continue to be rated as Moderately Satisfactory. Project Closing Date Extension. World Bank Management and the Recipient agreed to extend the closing date of the project from March 31, 2015 to December 31, 2015. In the restructuring of MSISTAP in January 2014 the Bank and the Client committed to delivery three safeguards-related activities: (i) A Resettlement Remedial Action Plan and Resettlement Policy Framework for the Erdenes Tavan Talgoi Mine; (ii) A Review of the Erdenes Tavan Tolgoi Environmental and Social Management System; (iii) A Cumulative Impacts Assessment (CIA) of the Tavan Tolgoi Coal Mine Region. The first and second activities were delivered and financed by MSISTAP. The CIA will be financed by the Mining Infrastructure Investment Support (MINIS) Project, P118109 as all MSISTAP funds were fully committed to other activities. The CIA will be completed by the end of calendar year 2015. No further activities will be financed by MSISTAP during this period. MSISTAP Completion Workshop. A workshop to showcase the achievements of MSISTAP and obtain feedback from stakeholders on the project, was delivered in March. The event featured the feedback of direct project beneficiaries and the views of a panel drawn from outside of the project and members of the audience on wider issues in mining sector development that might inform future engagement between the Government and the World Bank. ICR. The MSISTAP ICR was launched during the February/March supervision mission to collect relevant information and begin to assess project performance ahead of planned closure. The MSISTAP PIU published a report on MSISTAP activities which can be found at www.MSISTAP.gov.mn entitled: REVIEW OF ACTIVITIES FINANCED AND THEIR CONTRIBUTION TO PROJECT OBJECTIVES. A Project Closing Workshop Report is also available at the site. The four project components are rated as follows: i) Strengthening capacity to manage mining revenues: SATISFACTORY ii) Improving regulatory capacity to manage mining sector development: MODERATELY SATISFACTORY iii) Development of capacity to manage state equity: MODERATELY SATISFACTORY iv) Project management: SATISFACTORY Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  --  Substantial Macroeconomic  --  --  Moderate Sector Strategies and Policies  --  --  Substantial Technical Design of Project or Program  --  --  Moderate Institutional Capacity for Implementation and Sustainability  --  --  Moderate Fiduciary  --  --  Moderate Environment and Social  --  --  Substantial Stakeholders  --  --  Substantial Other  --  --  -- Overall  --  --  Substantial 6/1/2015 Page 2 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) Results Project Development Objective Indicators PHINDPDOTBL  Annual Budget decisions to replenish or withdraw from newly established Sovereign Wealth Fund are made based on agreed Macroeconomic criteria (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Fiscal Stabiltiy Law Fully Achieved. Fiscal adopted in 2010 (went Stabiltiy Law adopted in Criteria agreed into force in Jan 2013) 2010 (went into force in and regulates deposits into Jan 2013) regulates implemented in Value None and withdrawals from deposits into and Budget the Fiscal Stabilization withdrawals from the framework for Fund and sets fiscal Fiscal Stabilization Fund 2012 Budget rules. and sets fiscal rules. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Dec-2013 PHINDPDOTBL  Level of mining related transfers from national government to Aimag and Soum authorities is known and publicly disclosed. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Fully achieved. Integrated Budget Law Disclosed and Integrated Budget Law of Dec 2011 addresses discussed/moni of Dec 2011 addresses Value Not currently disclosed financial flows to and tored by citizen financial flows to and uses of funds at sub- groups/civil uses of funds at sub- national level. society national level. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Dec-2013 PHINDPDOTBL  Mining Tax Audits are completed and assessments raised (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 2 audits completed; Fully Achieved. 2 audits Minimum of two guidelines and completed; guidelines Value none currently audits manuals for auditors and manuals for auditors completed adopted in 2014 adopted in 2014 Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDPDOTBL  Clear authority and responsibilities for Government mining sector management institutions, especially regarding environmental and social aspects associated with mining activities. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/1/2015 Page 3 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) Functional Fully Achieved. management review of Functional management MoM completed in review of MoM 2013 and completed in 2013 and recommendations on recommendations on Institutional clarifications of roles clarifications of roles and roles clarified in Roles confused resulting in and authorities Value authorities provided and line with clearly gaps and conflicts provided and accepted accepted by MoM. stated by MoM. SESA SESA completed in regulations. completed in 2014 and 2014 and clarifies roles clarifies roles on on env/social side. env/social side. Mining Mining Law revised in Law revised in July July 2014 2014 Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDPDOTBL  mineral licensing procedures streamlined and processing times reduced (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Revised Mining Law adopted July 2014 and the ban on issuing new licenses which was in Fully Achieved. Mineral place since 2010 is Licencing processing is Value 4-6 months 2 months being lifted. Time for completed within 1 processing will be month. verified before project closure based on actual records Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDPDOTBL  Geological information is digitized and published and readily available in user friendly digital formats. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Target not met. MSISTAP financed an institutional functional review of mining-related regulatory agencies (completed 2013). Its recommendations very limited, no digital included establishment 200,000 data Value Willl not be met geochemistry of an independent points digitised national geological survey to serve the public interest in knowledge and excellence in the geo- sciences and the employment of geo-data 6/1/2015 Page 4 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) to support planning and management of natural resource use, including minerals and hydrocarbons. The Ministry of Mining is prioritizing this reform and seeks support to implement it on the basis of a clear institutional mandate, strategy and institutional capacity development. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDPDOTBL  Companies and civil society participate in consultation for pieces of legislation and regulation for mining sector through public fora arranged by the government. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Companies and Civil Fully achieved. society participate in Companies and Civil consultation, including society participate in Consultations proven involvement in consultation, including taking place for consultation on the proven involvement in policy, each Value No data availabe. Mining Law revisions, consultation on the piece of new Transparancy Law Mining Law revisions, legislation and and various regulations new Transparancy Law regulation. issues for and various regulations environmental law in issues for environmental 2013. law in 2013. Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 Overall Comments Intermediate Results Indicators PHINDIRITBL  Sovereign Wealth Fund or alternative revenue stabilisation mechanism established (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Soverign Wealth Fund Fully Achieved. Soverign Mongolian Development established in 2013 Wealth Fund established Fund in place but deficient New Fund Value when the Fiscal in 2013 when the Fiscal without defined operating Operational Stability Law went into Stability Law went into criteria force. force. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 6/1/2015 Page 5 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) PHINDIRITBL  Support establishment of mechanisms for preparation and dissemination of independent professional mining sector economic and policyreports. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Several reports Fully Achieved. Several produced by a reports produced by a research institution and research institution and No policy unit serving published on Produce first Value published on economics Prime Minister economics and mining report and mining policy; policy; conferences conferences organized organized to discuss to discuss reports. reports. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Modern Mining cadastre regulation adopted and promulgated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Mining law revised in July 2014 which Fully Achieved. Mining specify provisions for Mining law revised in July 2014 tendering and first Cadastre is in Regulations under which specify provisions Value come first served use and has preparation for tendering and first approach on licensing; public access come first served new regulations due and tendering approach on licensing.. before November 2014. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Preparation of Draft Model Mineral Development Agreement (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Production Sharing Agreement drafted and under consultation. Partially Achieved. Draft Model Model Mining Production Sharing PSA and Agreement and Model Agreement drafted and Mining Community Devt under consultation. Agreements Value First draft prepared Agreement will be Model Mining consistent with prepared in 2015. Agreement and Model International Provisions for the Community Devt best practice model agreements in Agreement will be adopted and place in the revised completed in mid-2015. utilised Mining Law 2014 and Petroleum Law Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Dec-2013 6/1/2015 Page 6 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) PHINDIRITBL  Income tax laws on mining amended and supporting regulations drafted (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Achieved - Windfall Fully Achieved - Windfall Final profit tax law of 2006 profit tax law of 2006 modifications to revised in 2010; Income tax law for mining revised in 2010; tax laws Value Investment code deficient Investment code revised submitted to revised in 2013 - in 2013 - changes in Parliament for changes in force from force from 2014. consideration. 2014. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Options study prepared on double taxation treaties (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Work completed on double taxation treaties – Treaties exist but Government Value Government dissatisfied Achieved Fully Achieved satisfied with with operations current position on double taxation treaties. Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Dec-2013 PHINDIRITBL  GDNT tax audit staff trained and competent to carry out mining company tax audits (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Achieved; tax audit Fully Achieved; tax audit department received department received 10 staff trained no staff trained to multiple support and multiple support and of which 2 are Value international standards study tours (all relevant study tours (all relevant leading mining staff participated - staff participated - tax audits exceeds target) exceeds target) Date 26-Jun-2009 15-Oct-2014 14-May-2015 31-Mar-2015 6/1/2015 Page 7 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) PHINDIRITBL  Ministry of Mining policies reviewed and revised (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Some work has been undertaken to review the Ministry’s strategic Government communications plan. New Mineral Policy Fully Achieved. New adopts MSISTAP has also funded formally adopted/ Mineral Policy formally recommendatio Value advice on how to passed by Cabinet in adopted/ passed by ns in the form bestdevelop the mining January 2014 Cabinet in January 2014 of policy industry, including statements. opportunities for downstream processing in Mongolia. Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Modern company reporting requirements regulations are prepared, promulgated, implemented, and monitored (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Almost achieved - Almost achieved -Mining Reporting exists in regulations Mining law updated in law updated in July 2014 Value regulations but needs issues and July 2014 and includes and includes reporting modifications and follow up passed reporting requirements requirements Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Modern occupation, health and safety regulations are prepared, promulgated, implemented and monitored. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Legislation passed, Partially Achieved. authorities Mining law adopted, Regulations exist but Mining law adopted, actively regulations to be Value require update and regulations to be monitoring updated according to modernization updated according to the health and the new law new law. safety practices based on new regulations. Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 6/1/2015 Page 8 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) PHINDIRITBL  Strategic environmental & social assessment undertaken, areas for improvement in social (including gender) & environmental regulation identified, recommendations made for updating laws (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target SESA completed in Results Fall 2014, Almost Fully Achieved. SESA presented, achieved -- SESA Value Limited completed in December, Government submitted for 2014. responding to ministerial approval by key findings MoM and MoEGD. Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Consultation with a range of stakeholders including civil society, community members and the private sector undertaken as part of asocial and environmental strategic assessment process. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target SESA Consultation process completed. Value Limited Achieved Fully Achieved. Working local engagement tools (models) evolved Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Modern mine closure and post closure regulations are prepared and promulgated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Modern mine closure and law and regulations require Partially achieved -- TA Partially achieved -- TA post closure Value closure planning but no provided (jointly with provided (jointly with regulations are specific regulation BGR) BGR) prepared and promulgated Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 6/1/2015 Page 9 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) PHINDIRITBL  Erdenes MGL financial reports are provided quarterly to the Board of Directors. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Financial reports are provided Value not systemic reporting Achieved Fully Achieved quarterly to the Board of Directors. Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Establishment of appropriate legal structure and preparation and adoption of suitable corporate charter and reporting arrangements for Erdenes MGL (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Appropriate legal structure and preparation and adoption of EMGL was established in suitable Value Achieved in 2010 Achieved in 2010 2007 corporate charter and reporting arrangements in place. Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 PHINDIRITBL  Provision of management-related and governance related training events to build capabilities needed within Erdenes MGL. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Management- related and no systemic capacity Value Achieved Achieved governance building related training event provided Date 28-Mar-2014 15-Oct-2014 14-May-2015 31-Mar-2015 Overall Comments Data on Financial Performance Disbursements (by loan) 6/1/2015 Page 10 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P108768 IDA-44890 Effective XDR 3.15 3.15 0.00 3.13 0.02 99% P108768 IDA-H4110 Effective XDR 2.57 2.57 0.00 2.57 0.00 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P108768 IDA-44890 Effective 26-Jun-2008 07-Oct-2008 04-May-2009 31-Dec-2012 31-Dec-2015 P108768 IDA-H4110 Effective 26-Jun-2008 07-Oct-2008 04-May-2009 31-Dec-2012 31-Dec-2015 Cumulative Disbursements Restructuring History Level Approved on 05-Jul-2012 ,Level 1 Approved on 10-Jan-2014 ,Level 2 Approved on 31-Mar-2015 Related Project(s) 6/1/2015 Page 11 of 12 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Mongolia Mining Sector Technical Assistance Project (P108768) There are no related projects. 6/1/2015 Page 12 of 12 Public Disclosure Copy