Wednesday, 9th February 2005 (2606 views)

Mongolia's gold output rose by almost 75 per cent last year, making it the world's fastest-growing producer.

N Algaa, executive director of the Mongolian National Mining Association told Bloomberg that Mongolia's 2005 output is expected to be about the same this year, as no more large mines will start production until 2006 or later.

Mongolia's mining industry is expanding after the country introduced new legislation in 1997 to attract investment. Mongolia, a landlocked country nearly three times the size of France and with a population of 2.6 million, is banking on growth in its mining industry to boost its economy.

Gold mining reportedly accounted for around 40 per cent of an estimated 10.5 per cent rise in Mongolia's gross domestic product last year.

Mongolia now ranks behind Kyrgyzstan, which produced 21.8 tons of gold last year, and Venezuela, at 23.2 tons, according to GFMS data.

Toronto-based Centerra Gold has begun production at its Boroo Mine, producing 19.2 metric tons last year, up from 11.1 tons in 2003 and Vancouver-based Ivanhoe Mines also plans to develop a copper and gold deposit in Mongolia that contains at least $69 billion worth of metals, based on average prices over the past year. Other Canadian mining companies exploring for gold in Mongolia include UGL Enterprises, QGX and Erdene Gold.

"Centerra has a hard-rock mine, which helps give us a base for more stable growth in our gold industry," Mr Algaa said. "Several Canadian junior companies are doing extensive drilling, so we expect more output sometime after this year."

 

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