Mongolian Law to prohibit mineral exploration and mining operations at headwaters of rivers, protected zones of water reservoirs and forested areas.

The purpose of this Law is to prohibit mining operations in most vulnerable areas associated with water sources (headwaters of rivers, protected zones of water reservoirs and forested areas) and to regulate rehabilitation activities carried out in the above-mentioned areas. The Law also aims to reduce conflict between mining companies and indigenous communities of herders. The Law does not affect areas containing deposits of strategic importance. The Government shall define the boundaries of the areas in which the prohibition shall apply. Headwaters of rivers, protected zones of water reservoirs and forested areas are defined in the Law on Water, the Law on Forests and this Law respectively. The prohibition shall not apply outside these areas if the licence holder engages in equitable rehabilitation, plants trees or builds an artificial lake or water reservoir. The Government shall pay compensations to those license holders whose licenses are cancelled. Holders of cancelled exploration and exploitation licenses are not discharged of their duty to rehabilitate the environment. Environmental rehabilitation activities must be completed within two years under the monitoring of local governors and local citizens (environmental and nongovernmental organizations by decision of a Citizens’ representatives Khural).