Mongolia shifts mineral royalty calculation to domestic stock market price

The government of Mongolia announced a major policy shift in the calculation of royalties on mineral resource export.
In the beginning of October, the exporters will pay royalty tax based on the average price of coal or the mineral products traded in the mineral commodities trading of Mongolian Stock Exchange, instead of international and regional benchmark prices that have been used since 2021.
Under the new regulation, each exporter is required sell at least 25% of their annual mineral output in the domestic stock exchange to calculate their royalty tax percentage. If companies’ trading volume fall below than 25%, stock market based calculations will not apply.
“The companies no longer afford to pay royalty tax when the price fall sharply. Currently coal, iron ore and fluorspar exporters are being taxed 20-45% higher than the real price, said Damdinnyam Gongor, Minister of Industry and Mineral Resources highlighted told reporters during the press briefing in the parliament palace.
The shift is expected to resolve long-term disputes between exporters and tax authorities. Plus, strengthen the role of mineral commodities exchange of the Mongolian Stock Exchange.
Until now, the royalties have been calculated using the mix of international and regional sources such as as SXCoal, Umetal or IndMin which are common to publish inconsistent prices.