The first “Gold” programme helped the troubled economy in the 1990s by adding to the state budget. The current government believes that implementing the “Gold-II” programme in two phases from 2016 to 2020 will increase annual gold extraction by 2-3 tonnes, reaching 25 tonnes by 2020, and put 33-59 billion MNT into state coffers as a fee for the use of the minerals.

The Gold-II program can be strengthened and increase the income beyond the current calculation via small-scale miners, previously known as illegal miners or ninjas and later renamed artisanal miners after the government passed regulation #308.

Unofficial statistics estimated there were at least 60,000 artisanal and small-scale miners in Mongolia. If all the gold extracted by ASM miners was submitted to the Bank of Mongolia, it would be a big step forward. The reason why so much gold is not submitted lies in Mongolia’s gold-sales system, with the lack of formalisation of artisanal and small-scale miners’ gold sales.

A clear description of the origin of the gold along with a mineral usage tax and income tax would help the official gold supply chain meet world standards.

However, there are some challenges. It takes two to three days for citizens to submit extracted gold to the Bank of Mongolia; it takes only minutes when handled by a middleman. In addition, traveling to Ulaanbaatar with gold in the pocket is wasteful and dangerous.

Due to the lack of access to information on the market price of gold, artisanal and small-scale miners sell their gold to middlemen at lower prices. This is the result of a lack of information and understanding. For example, middlemen spread the false understanding that selling gold to the central bank will cut 10 percent of profits in individual income tax, thus lowering profits from sales.

Some of artisanal and small-scale miners have no legal land for ownership. And the lack of clarity about the individual income tax system keeps artisanal and small-scale miners from formally selling their gold. Artisanal and small-scale miners currently pay a 2.5 percent minerals usage tax on every gold sale.

SAM project supports formalisation of gold supply chain, assurance of gold origin record, and establishment of a pilot one-stop shop for gold sales.

The Mongolian Government implements Gold-II programme to enrich treasure and monetary funds which provides major contributions to macro economy of the country.