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1. Debt Policy of State-Owned Mining Enterprises in Mongolia

Author:
Andrew Bauer and Batpurev Ayushsuren
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Mongolia relies heavily on state-owned enterprises (SOEs) to manage several key mining assets. Baganuur, Shivee Ovoo, Erdenet, Mongolrostsvetmet and Erdenes Tavan Tolgoi are the most important majority state-owned companies operating large-scale mines. From 2019 to 2021, debt held by mining SOEs increased 4.3 times. The total liabilities of these companies reached USD 2.3 billion, representing 15 percent of GDP. The new debt was largely issued to cover social spending and an economically questionable railway project. It is unclear how the government intends to service this debt, particularly since profitability at most mining SOEs has been weak and most face liquidity challenges. Mining SOEs’ poor financial health is due to the combination of quasi-fiscal activity financing, poor project selection and management, and inadequate legislation and control mechanisms for new debt issuance. Legal reforms to new debt issuance and stronger Ministry of Finance oversight of SOEs are needed, in addition to stricter implementation of existing legal requirements such as collecting and disclosing complete data on SOE debt. Mongolia’s government should also review mining SOE quasi-fiscal expenditures, such as price controls on coal, and other reasons for low profitability of mines.
Topic:
Debt, Natural Resources, Mining, and State-Owned Enterprises
Political Geography:
Mongolia and Asia

2. Managing Senegal’s Oil and Gas Revenues

Author:
William Davis, Andrew Bauer, and Papa Daouda Diene
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
As of late 2021, Senegal is on the cusp of becoming a significant oil and gas producer. The revenues that it can expect to mobilize present it with an important opportunity to speed the country’s development by increasing public investment. In preparation for this, Senegalese authorities are currently revising the country’s framework for managing its oil and gas revenues, which remains a work in progress. The authors of this report evaluate various aspects of Senegal’s policy framework for managing oil and gas revenues and share recommendations as to how it could be strengthened.
Topic:
Oil, Natural Resources, Gas, and Revenue Management
Political Geography:
Africa and Senegal

3. Wild Growth: An Assessment of Erdenes Mongol

Author:
Andrew Bauer and Dorjdari Namkhaijantsan
Publication Date:
06-2019
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Erdenes Mongol is Mongolia's most influential state-owned mining enterprise. It was established in 2006 to represent the government of Mongolia's interests in strategic mines, manage mineral licenses and promote the mining sector. In recent years Erdenes Mongol has evolved into a complex conglomerate with interests in many sectors, including unconventional oil and gas, roads, hospitality, power generation, steel, and asset management. The company's expansion represents an implicit government choice to invest in specific sectors rather than others, such as education, healthcare or renewable energy. Erdenes Mongol does not publish financial information on most of its subsidiaries and joint ventures. However, many are unprofitable. Those that are profitable, such as the Tavan Tolgoi coal project, have yet to pay any dividends to the state treasury. The Government of Mongolia may wish to consider several reforms, such as: (1) Enacting a new state-owned enterprise or Erdenes Mongol-specific law; (2) Clarifying the company's financial and governance relationship with subsidiaries; (3) Performing project-by-project market assessments in order to determine which assets to purchase and sell; (4) Developing clear criteria and an open process for appointment and dismissal of board members and managers; and, (5) Requiring greater public disclosures and audits, especially of subsidiaries and joint ventures.
Topic:
Natural Resources, Business, Mining, and Trade
Political Geography:
Mongolia and Asia

4. Discussion of Guyana’s Green Paper

Author:
Andrew Bauer, David Mihalyi, and Fernando Patzy
Publication Date:
01-2018
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Guyana is on the verge of becoming an oil-rich country. In absolute terms, Guyana’s petroleum wealth is modest, representing approximately 0.2 percent of global reserves, which places the country 26th globally. However, it possesses the world’s seventh-largest oil reserves per capita, second-largest in Latin America behind Venezuela. If revenue estimates from the Liza field prove to be accurate, Guyana could become one of the world’s largest per capita oil producers over the course of several years in the mid-2020s. According to independent projections, fiscal revenues from the petroleum sector could range between USD 7 and 27 billion over the next 30 years. Between 2025 and 2028, revenues could peak at between USD 800 million and 2.5 billion in a given year, at least doubling Guyana’s national budget in some years. That said, delays on these types of megaprojects are common and some revenue estimates may be optimistic.
Topic:
Natural Resources
Political Geography:
Global Focus