Mongolia seeks to limit restrictions on foreign investment

By bne IntelliNews March 20, 2013

bne -

The Mongolian government has drawn up an amendment to the country's controversial Strategic Foreign Investment Law that would relax restrictions on private investors.

The move is a reaction from the government to rising problems provoked by the recent resurgence in resource nationalism in both Mongolia and the wider Central Asian region. Protectionist forces pushed through the original legislation in 2012; it currently requires foreign companies secure permission from parliament before acquiring a stake greater than 49% in any company in a strategically important sector of the economy.

The proposed amendment would limit this restriction to foreign state-owned companies, thereby exempting private companies, Prime Minister Norov Altankhuyag announced, according to reports in the Mongolian press. The law applies to companies in the mining, finance and communications sector.

The largest casualty of the legislation thus far has been the planned acquisition of a controlling stake in SouthGobi Resources by China's state owned Aluminum Corporation of China Limited (Chalco). Chalco announced in September that it was abandoning the $938m deal as it did not expect to get regulatory approval.

"The pending changes will be welcome news for investors and should reinvigorate foreign capital into the market," writes the Mongolian Investment Banking Group. "While the Draft Minerals Law is still an obvious concern, we believe that this announcement should be seen as a strengthening commitment to foreign investors from the government."

Related Articles

COMMMENT: Great challenges for Eurasia call for decisive solutions

Juha Kähkönen of the IMF - The Caucasus and Central Asia (CCA) region continues to navigate a wave of external shocks – the slump in global prices of oil and other key commodities, the slowdown ... more

IMF calls for Central Asia to tighten monetary policy

Naubet Bisenov in Almaty -   Caucasus and Central Asian (CCA) countries need to tighten their monetary policy to anchor inflation expectations, but excess tightening may weaken financial ... more

Business leader-turned-technocrat ready to mine Mongolia's “treasures”

Terrence Edwards in Ulaanbaatar -   One of Mongolia's premier dealmakers has taken on the supreme task of putting the country's mining and infrastructure projects back on track after years of ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss